For most of the 20th century and into the 21st century, the US equities market has been the deepest, broadest and largest equities market in the world. Historically, growing companies, whether domestic or foreign, have south to raise capital in the US.

However, for both domestic and foreign issuers, the costs associated with conducting an initial public offering (IPO) in the US (along with the additional disclosure, corporate governance other requirements applicable to US public companies, which must report to the US financial securities regulator, the Securities and Exchange Commission (SEC)), can be daunting. Public companies are also subject to greater scrutiny in relation to their operations, and companies and their officers and directors face heightened liability risks. In addition, following changes to the market structure, the enactment of the Sarbanes-Oxley Act and the general perception that the regulatory requirements to be met to finance companies in the US had become overly burdensome, many companies sought alternatives. Therefore, instead of pursuing an IPO in the US, many domestic and foreign issuers chose to...

Originally published in Capital Markets Multi-Jurisdictional Guide 2014.