The Securities and Exchange Commission has voted in favour of proposing new
rules that would make it easier for non-US companies to exit the US market.
Under current rules companies may withdraw it listing at any time, but would
still be required to file their accounts at the SEC, unless the company has less
than 300 shareholders who are US residents.
The proposed new rules would mean that companies that have been registered
for the past two years could withdraw their registration if US residents held no
more than 5% of the worldwide public float.
However, this figure is raised to 10% is the company is a ‘well-known
seasoned issuer’ with an average US daily trading volume that is 5% or less of
average trading volume in the company’s main trading market.
Companies have argued that current rules are too tough, with many wishing to
exit the US market as the benefits of the listing no longer outweigh the costs
of compliance, due to the introduction of the Sarbanes-Oxley Act.
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