CurrencyTrading.net has an interesting piece titled, 12 Surprising Implications of London’s Replacing New York as the World’s Financial Center by Jessica Hupp.

Here’s just one of the “implications” :

“Financial regulation: After scandals like Enron, the financial industry is more heavily regulated. The Sarbanes-Oxley Act required lots of tightening of financial controls. As a result, it’s less attractive to do business in a country where every transaction is scrutinized.”

Read the whole article here.

American regulatory filings show that 35 foreign companies have delisted from American stock exchanges since April.

Rising costs, over-regulation and a culture of litigation have been cited as reasons for the exodus. In addition, US investors are preferring to buy stocks directly in overseas markets rather than from secondary listers in America.

British Airways, Danone and ICI have all described multiple accounting standards, lower trading volumes and near-draconian compliance under Sarbanes-Oxley law as reasons for turning away from secondary listings.

London is seen as the main beneficiary of this trend.

IdaTech, an Oregon fuel-cell company will bypass the New York stock markets, Nasdaq and the NYSE, and list on the London Stock Exchange. The flotation is valued at £100m ($195m).

Observers believe this is another sign that America’s draconian Sarbanes-Oxley legislation is proving a turn-off for U.S. firms.

IdaTech manufactures environmentally friendly generators for industry and for recreational use. Owner Investec, with 96 percent of the stock, is selling between 50 and 60 percent of its holdings.

In today’s Times Business, Irwin Stelzer muses about Wall Street’s apparent loss of confidence in its future :

“New York Mayor Mike Bloomberg, all a twitter about Wall Street’s loss of market share to the City of London, hops over to meet financial regulators in the City. SEC chairman Chris Cox tells me he is studying FSA chairman Callum McCarthy’s use of light-handed, principles-based rather than rules-based regulation to control City types who might be overly zealous in their pursuit of bonuses.

“… Bloomberg, Treasury Secretary Hank Paulson and others blame Wall Street’s declining market share on the burdens placed on corporate boards by the Sarbanes-Oxley Act. Never mind that investment bankers’ fees are higher in America …”

However, not a lot may come of this, Stelzer thinks :

“Despite pressures coming from Messrs Bloomberg and Paulson, Hillary Clinton and others, congress and the SEC are unlikely to do more than make a slight move in the direction of UK-style, principles-based financial regulation.”

No wonder London is feeling fairly confident about its future as a world financial centre when, all around, others are losing their heads.