The introduction of the Sarbanes-Oxley Act in 2002 has not put the United States at a competitive disadvantage with its European counterparts, according to Michael Oxley, former US Congressman and co-author of the act, commonly known as SOX.

In a podcast interview with Gartner Inc analysts Bruce Bond and Vincent Oliva on the fifth anniversary of the introduction of the act, Oxley said that although there is evidence that some European financial markets are becoming increasingly attractive, the US is still regarded as the safest and fairest of international markets with the highest standards.

Oxley, currently vice chairman of the NASDAQ stock exchange, also said that since the introduction of SOX in the US, many countries, both developed and developing, have moved towards higher standards of corporate governance and listing requirements.

The predicted 'race towards the bottom' that was widely predicted after the New York Stock Exchange and NASDAQ tightened their listing standards has failed to materialise.

"Frankly it has been mostly the opposite of what many predicted," said Oxley. "Other countries have stepped up and understood how important it is to have these kinds of standards and I would expect that this will continue apace and continue to pay great rewards."

When asked whether he thought that SOX would stifle innovation in the US on a long-term basis by limiting the ability of smaller, more innovative companies to access capital markets, Oxley said that regulations would be continually reviewed to ensure that this would not happen.

He cited the example where NASDAQ has developed a market for 144a transactions in which a company can access capital with qualified investors without registering with the Securities and Exchange Commission and without complying with Sarbanes Oxley.