Thain: Cut taxes, reform to woo capital to U.S.

By Anupreeta Das

BOCA RATON, Fla., Nov 8 (Reuters) - U.S. regulators need to lower corporate taxes and reform legislation to support U.S. markets as global competition heats up and exchanges compete fiercely for deals, listings and market share, NYSE Euronext (NYX.N) Chief Executive John Thain said on Thursday.

"We're going to need help on taxes, regulation and certainly on trading if we're going to compete in the global marketplace," he said at the annual meeting of the Securities Industry and Financial Markets Association (SIFMA) here.

Thain, who is rumored to be under consideration for the job of Citigroup Inc's (C.N) next chief executive after the ouster of Chuck Prince, said U.S. corporate taxes are far higher than in Europe, making it tough for the country to attract new capital.

Policy makers need to view U.S. tax policies from a global perspective and amend rules to attract capital to the United States, Thain said at the SIFMA general session.

This year, the annual conference has attracted 650 people to this sunny corner of Florida, representing brokers, trading technology providers and other financial industry officials.

But lowering corporate taxes from the current 40 percent -- which would put the United States on a level playing field with Europe, where the average rate is 26 percent -- should not come at the cost of hurting small business, Thain said.

Thain said a more "responsive regulatory environment" was equally necessary to prevent capital flight, especially given that some of the biggest recent initial public offerings have not come to U.S. exchanges.

The New York Stock Exchange has transformed itself from a members-only organization to a global, for-profit exchange group since it went public in 2005.

Thain has said on several occasions that the exchange he has headed since 2004 will play a leading role in the global consolidation among bourses.

NYSE has made acquisitions or bought stakes in other exchanges, introduced automated trading and is overhauling many outdated rules that still govern the buying and selling of stocks on its markets.

But the exchange's push to increase the pace of global trading is slowed by the regulatory environment, he said.

Some proposals filed to the U.S. Securities and Exchange Commission by the Big Board more than a year ago are still awaiting approval, including one calling for an improvement in the way the exchange provides market data, Thain said.

As new technologies and global consolidation allow exchanges to offer trading across product classes and national boundaries, regulators must also develop a system of "mutual recognition" so that foreign companies need not duplicate their efforts when submitting disclosures and other regulatory requirements, Thain said.