SEC Eases Delisting for Foreign Companies

from IHT

It will be much easier for foreign companies to withdraw their securities from American public markets, so long as those securities primarily trade outside of the United States, the U.S. Securities and Exchange Commission has indicated.

Many companies have asked to withdraw, maintaining that doing so would save them money and that American investors, particularly institutional ones, would still choose to buy their securities on foreign markets.

For companies that withdraw, Americans would no longer be able to obtain financial statements and other disclosures of the companies through SEC filings, and the companies would not have to adjust their financial statements to U.S. accounting rules. Trading by Americans would move to foreign markets, where trading costs could be higher.

The commission has traditionally taken the position that if American investors bought a security while relying on disclosures required by U.S. law, it should be very difficult for a company to cease making such disclosures so long as a significant number of Americans still own the security.

More here.


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