|  | | 2005 News and Press Releases | | |
HEADLINE NEWS:
SEC Plans To Ease Delisting
Staff Writer – Deal.com
Securities Mosaic. December 8, 2005
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EXCERPT: A new Securities and Exchange Commission proposal aimed at making it easier for foreign companies to delist from U.S. stock exchanges doesn't go far enough, complain international organizations representing overseas firms operating in this country. The SEC is expected to propose on Dec. 14 new criteria for allowing foreign companies to delist and, consequently, end their corporate filing obligations with the SEC. For the biggest companies, delisting would be allowed if 10% or less of a company's total shares are held by U.S. investors and its trading volume in the U.S. is an insignificant share of worldwide trading volume. Smaller foreign companies can end their listing and reporting obligations with the SEC if a specific small percentage of their total shares are held by U.S. investors. The broad outline of the SEC's plan were obtained by sources following the initiative, but the specific thresholds contemplated by the agency have not leaked out. Under the current rule, which dates to the 1960s, foreign companies wishing to remove their securities from U.S. stock exchanges must have fewer than 300 U.S. shareholders. Overseas-based companies have bristled under the rule, arguing that it is too difficult to verify the residency of such a specific number of shareholders. The complaints are getting louder, however, because of new costs associated with Sarbanes-Oxley regulations, said Todd Malan, president of Washington-based Organization for International Investment. The fear of Sarbanes-Oxley burdens, and perceived problems with delisting are discouraging foreign companies from making new listings on the U.S. capital markets. "International companies are thinking twice about listing on U.S. stock exchanges because they realize that it is so difficult to get out once you become a registrant," Malan said. "I am concerned that the proposal will not provide a transparent and direct path for exiting U.S. markets." |
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