Within weeks of the SEC’s decision to ease the delisting requirements of foreign companies with illiquid US stock listings, a number of large European companies packed their bags – including Adecco, the world’s largest temporary employment agency, and SGL Group, one of the largest carbon fibre and graphite manufacturers.
According to senior investment bankers, more are likely to follow.
The new SEC rule will allow any foreign company to deregister if it can show that the average daily US trading volume in its shares has been no greater than 5% of its global trading volume over the past 12 months.
According to the SEC, about 29% of the 1,200 foreign companies with a US listing, or about 360 companies, could fit the bill.
But while many foreign companies are planning their departure, British sugar refiner and artificial sweetener manufacturer Tate & Lyle announced this April that it would have its shares traded in the US, not on one of the big exchanges but on the Pink Sheets, an OTC trading system best known for shell companies and nano caps.
Sweet arrival
Tate & Lyle has become one of the first large foreign firms to join the Pink Sheets’ new segment for high-quality international companies, called International Premier QX.