The European Commission has welcomed new rules proposed by the United States (US) Securities and Exchange Commission (SEC) that would make it much easier for non-US companies listed on US capital markets to deregister from those markets at a time of their choosing, once certain criteria have been fulfilled. In the Commission's view, the new rules, which are based on a comparison of the company's trading volume on the US market and on its primary market, have the potential to largely resolve issues concerning the existing rules, which are based on the number of US investors and are considered by EU companies to be overly restrictive. In addition, the Commission strongly encourages SEC to ensure swift adoption of its revised proposal. The Commission has set out these views, as well as some additional technical comments, in a letter to the SEC responding to its call for comments on the proposed rules. The Commission's response is supported by EU Member States and European issuers associations.
Internal Market and Services Commissioner Charlie McCreevy said: "The SEC's new approach is sensible, practical and workable. EU companies will be more inclined to enter US capital markets and stay there if rules on leaving those markets are made less restrictive. This represents real progress, and shows that the EU-US Financial Markets Regulatory Dialogue can make a difference in addressing transatlantic financial issues."
Technical comments
In its letter, the Commission has also made some technical comments on SEC's proposal. In particular, the Commission would like to see an increase in the trading volume threshold, which stands at 5% under the proposal. A higher threshold would allow a higher number of EU issuers to use the new rule.
Also, the Commission has requested SEC to use the worldwide trading volume instead of the primary market trading volume, thus taking into account all markets where the security is traded.
Further information
The Commission's letter and relevant background
material are available at:
http://ec.europa.eu/internal_market/finances/global/index_en.htm
