SEC proposals won’t help European companies

Proposals aimed at making it easier for international companies to escape the regulatory requirements of a US listing do not go far enough for many businesses in Europe.

The Securities and Exchange Commission responded to calls from those trapped by its registration rules by proposing a change in December that would enable greater numbers of companies to escape the requirements of the Sarbanes-Oxley Act, should they wish. However, the Financial Times reports that a coalition of leading European business associations will tell the regulator that the changes will make little difference to the number of companies able to deregister.

Currently, a non-US company can only deregister from the SEC if it has less than 300 US-based shareholders. The suggested change would mean companies with less than 5% of its shares held by US investors could exit the American market. This rises to 10% for larger companies as long as this shareholding accounts for less than 5% of daily trade volumes.