BusinessCompany NewsSEC backs down on foreign company delistings

SEC backs down on foreign company delistings

Securities and Exchange Commission  has eased back on its proposals for foreign company de-registrations

Foreign companies listed on US stock exchanges could find it easier to delist
in the future, according to
revised
plans
mooted by its financial watchdog.

The Securities and Exchange
Commission
has proposed that foreign issuers will be able to delist
from its exchanges based on how many shares are traded in a company in the US.

Although the trading volume threshold has not been suggested, it is
understood that the vast majority of share trading in foreign companies listed
in the US takes place outside of the country.

The SEC had originally planned to based
deregistration
thresholds
on trading volume and the percentage of US shareholders
of the company.

‘We believe that the new proposal will better serve the needs of both US
investors and foreign issuers by providing a clear, consistent, easy-to-apply,
and fair standard pursuant to which foreign registrants may withdraw from our
capital markets and end their obligations to comply with our rules,’ commented
John White, director of the Commission’s division of corporation finance.

It will enter a 30-day comment period on its revised proposal, and will make
a final decision in the New Year.

Further reading:

SEC reviews expensive Sarbox accounting
rule

US ‘must revise Sarbox to stay
competitive’

Can the government protect the LSE from
Sarbox?

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