According to the Wall Street Journal, many European businesses are removing themselves from the American stock market. Before you start to think this is radical activism on the part of blue-chip Euro companies, take a step back--

"The rush to delist and deregister is, in the first instance, about money: Being a U.S. reporting company is about to get a whole lot more expensive. This is because of Section 404 of the Sarbanes-Oxley Act..." (This act is designed to cut down on Enron-style corporate fraud by imposing more financial reporting requirements on companies. One should note, however, that the US already has much higher reporting requirements than Europe--the latter's companies need only publish annual reports, but US companies must publish quarterly. Many argue that this makes American companies too focused on short-term gains.)

But the WSJ says it's not so much the added cost that's causing the pullout, it's "the absence of any countervailing benefit from continued U.S. listing..." In an uncharacteristically tongue-in-cheek comment, when the SEC chairman said America's markets are like "the U.S. Marine Corps: an elite -- the best of the best", the WSJ noted that "Many Europeans would think the comparison between U.S. securities law and the U.S. military all too apt, though they might draw the analogy somewhat differently."

How do US policymakers respond? They actually don't care a whole lot. The reason why is interesting: "Whatever proposals are made, they will be aimed not at accommodating the demands of European companies to get out, but at persuading issuers in developing markets -- China, Russia, Latin America -- that it is safe to get in."