From high fashion to high tech, businesses continue to find America's public securities markets to be a very expensive place to do business. This week brings news that Tommy Hilfiger Corp., which left the New York Stock Exchange to go private in 2006, may go public again, this time on the Amsterdam exchange. Since both exchanges are now part of the combined NYSE Euronext, you might say this is a vindication of new Merrill CEO John Thain's strategy when he led the NYSE. But it's also another warning about the competition facing American capital markets.

Kate Mitchell of Scale Venture Partners says that even start-up companies are spending up to $3 million per year to comply with Sarbanes-Oxley in preparation for going public. "We're at the point of overkill," she notes, adding that regulation has changed the message her companies hear from investment banks. "When we get pitches for IPOs, they always bring into the mix European exchanges, Asian exchanges, even the Canadian exchanges . . . Five or 10 years ago, we never heard that."

Will new rules approved last summer by the SEC and its relative, the national accounting board, help America regain its edge? Ms. Mitchell isn't so sure. "The accounting firms culturally are just not ready to embrace reform in the way we'd hoped."

Dealogic reports that U.S. exchanges are on pace to eke out a victory over London in IPO dollar volume for 2007, while the NYSE and Nasdaq combined are still trailing London-based exchanges in the number of deals. Given the relative sizes of the economies, the U.S. should be winning in a runaway. Dealogic also reports that unregulated 144A offerings, which are available mainly to institutional investors, are once again on pace to surpass the dollar volume of equity offerings on U.S. exchanges.

Wealthy investors and companies raising capital are voting with their wallets against America's regulated markets, and that means individual investors lose access to an increasing number of stock issues -- one more ironic result for Sarbanes-Oxley and other laws that were promoted and passed in the name of aiding small investors.