In a move designed to boost U.S. markets’ attractiveness to foreign companies, U.S. regulators voted Wednesday to make it easier for those companies to deregister themselves with the Securities and Exchange Commission.
By unanimous vote, the SEC’s five commissioners approved a rule that would allow a foreign company to terminate its registration if the average daily U.S. trading in its securities amounts to no more than 5% of worldwide trading.
The measure also contains investor protections, by requiring companies to wait 12 months to deregister or to have already met the trading volume standard when they delist.
The rule is also timed to allow companies to avoid a deadline to comply with a much-criticized part of the 2002 Sarbanes-Oxley law that requires what many businesses call expensive and time-consuming checks on accounting and internal controls.
SEC Chairman Chris Cox, a Republican, said the rule will benefit U.S. investors by removing a “disincentive” for foreign companies to list in the U.S.