SEC Re-Proposes Rules To Facilitate Exit From U.S. Exchange Act Registration & Reporting Requirements

The U.S. Securities and Exchange Commission (SEC) recently re-proposed and published for comment new rules intended to facilitate the process by which non-U.S. companies may terminate the registration of their securities under the U.S. Securities Exchange Act of 1934, as amended (Exchange Act), and their ongoing SEC reporting obligations under the Exchange Act.¹

Historically, non-U.S. companies have found it difficult to terminate the registration of their securities and their SEC reporting obligations under the Exchange Act even if their securities have been delisted from the applicable U.S. exchange or automated trading system and the U.S. market interest in their securities is relatively low.² The current rules for deregistration provide that a non-U.S. company may only deregister securities under the Exchange Act if the registered class of its securities has fewer than 300 U.S. resident record holders (or, alternatively, fewer than 300 record holders worldwide).³ In an attempt to