The corporate governance rules brought in after the collapse of Enron have inhibited smaller companies from accessing US capital markets and reduced the competitiveness of US stock exchanges, according to the chief executive of the American Stock Exchange.

Writing in the FT, Neal Wolkoff, chairman and chief executive of the American Stock Exchange, said while he was not in favour of dismantling the Sarbanes-Oxley Act, he was ‘concerned about the effects of Sox on small businesses’.

‘I see a growing trend of entrepreneurial companies deciding not to go public or listed companies opting to delist because of the high costs of complying with Section 404, which requires designing, documenting and auditing of financial controls,’ Wolkoff said.

As a result, 'many innovative companies are turning to foreign exchanges to list. Before the implementation of Sox they would have automatically listed on a US exchange’.