Financial Management: Global Financial Markets and a Simpler Way

The globalization of the world economies has brought about anticipated, as well as unexpected changes. One of the most controversial and complicated has been the investment process and the management of diverse and often involved international transactions. For the average investor, the complicated process simply overshadows the investment opportunity. As many of the regulations in the developed countries have changed, thanks to SOX and other government regulated legislative changes, the push to simplify the process has seen increased support. As markets have integrated, and activity among investors has increased across borders, countries, and continents, there is a need for greater simplicity. Hanging in the balance, is the positive result that the simplification of a single, internationally regulated system could bring to the process. For investors, a single regulatory system would increase the ease of making foreign investments, and increase the potential for diversification. The effects of a move toward a simpler international investment process are already evident, in the fact that US investors already allocate twice as much to international mutual funds as they do domestic. One of the more fascinating and unexpected facts: Of the 20 Latin American countries studied by the Financial Times, the World Bank of Colombia ranked second in terms of investor protection in international investments. One of the most often cited problems by foreign companies in establishing their presence on the New York Stock Exchange for increased international trading has been the burdensome regulations of the Sarbanes-Oxley Act. Many have stated that the expense is not worth the benefit. This seems to further enhance the need for an international trading system that simplifies the financial transactions for the investor and the company seeking investment. By Rene' V. Richards, Staff Writer, Big4.com, July 2006