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.

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