There used to be a famous advertisement on the New York subway for cockroach traps, whose slogan ran: "They check in, but they don't check out."
The experience has been much the same for some smaller global - but non-US - companies that are listed on US stock exchanges. Once listed, they discover that the benefits are few and the costs many. But leaving has been almost impossible, under the existing rules.
To leave, companies had both to delist and to terminate the mandatory registration, for regulatory purposes, with the main US regulator, the Securities and Exchange Commission. Being a foreign registrant is the difficulty.
Now, with US stock exchanges sliding out of favour, the SEC has decided to propose a rule that will change the conditions. Currently a company can deregister only if it can prove it has fewer than 300 shareholders resident in the US. And every individual who holds shares through nominees, brokers, dealers or banks has to be counted. The proposal is that foreign private issuers could deregister if 5 per cent or less of their share trading volume is in the US.
See full Article (paid subscription required).
Posts
