Accessing the US markets -- A warmer climate for foreign issuers

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This article first appeared in the June 2012 issue of PLC Magazine.

For years now, business leaders have argued that the regulatory requirements to be met in order to finance companies in the US, including those imposed by the Sarbanes-Oxley Act and, more recently, by the Dodd-Frank Act, have become overly burdensome. The decline in the number of initial public offerings (IPOs) undertaken by smaller or emerging companies in the US has been particularly dramatic during the last ten years.

The IPO process for foreign issuers

A foreign issuer that is considering accessing the US capital markets must choose between undertaking a public offering in the US, which subjects the issuer to ongoing securities reporting and disclosure requirements, and undertaking a limited offering that will not subject the issuer to US reporting obligations. Despite the regulatory burden described above, a public offering in the US offers distinct advantages for foreign issuers as the US public markets remain among the most active and deepest equity markets in the world.

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