SEC Adopts Rules To Facilitate Exit From U.S. Exchange Act Registration & Reporting Requirements

On March 27, 2007, the U.S. Securities and Exchange Commission (SEC) adopted 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 The new rules will be effective June 4, 2007.

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 Prior to the adoption of the new deregistration rules (and until these new rules are effective), the rules for deregistration provided that a non-U.S. company could only deregister securities under the Exchange Act if the registered class of its securities had fewer