Back in December, the Securities and Exchange Commission announced it would be changing the delisting and deregistration requirements for foreign companies. Last week, the public comment period for the proposed change ended, and the regulator adopted new rules, effective in July, relating to companies with secondary listings in the U.S.
According to a Financial Times story reprinted at MSNBC, the rules will allow a foreign company to deregister with the SEC after delisting from a U.S. exchange if:
[it] can show that average daily U.S. trading volume in its shares has been no greater than 5 percent of its global trading volume over the previous 12-months.
German graphite and carbon-based materials maker SGL Group is wasting no time in taking advantage of the new rules. The group is delisting from the New York Stock Exchange to cut compliance costs, according to euro2day, and it will deregister with the SEC as soon as the new rules become effective. Investors currently holding SGL American Depositary Receipts will have the chance to "swap" them, the story says, for German-traded stock in the company.
The move comes as the SEC and other groups work to ensure that U.S. markets maintain (or regain, depending on your perspective) their status as the world's best -- and to lessen the Sarbanes-Oxley compliance burden for domestic public companies. Other changes under consideration include eliminating audit redundancies and making compliance more "risk-based" instead of an exercise in box-checking.