Press Release: Commission to Consider Recommendation to Repropose Deregistration Rules for Foreign Private Issuers; 2006-202; Dec. 6, 2006
The SEC announced a reproposal to revise deregistration rules for foreign private issuers by basing thresholds solely on trading volume, not U.S. holder percentage, to simplify compliance and maintain investor protections, with no fraud or charges involved.
The SEC announced it would consider reproposing rules to allow foreign private issuers to deregister based solely on trading volume, abandoning the prior dual threshold that included U.S. holder percentage. This change responds to public comments and addresses gaps in the original December 2005 proposal, aiming to create a clearer, fairer standard for issuers seeking to end SEC filing obligations. The Commission emphasized the reform would preserve investor protections while enhancing U.S. market attractiveness to foreign companies, with a 30-day comment period planned and final rules expected in early 2007.
The Securities and Exchange Commission announced on December 6, 2006, that it would consider reproposing rules governing deregistration for foreign private issuers under the Securities Exchange Act of 1934. The proposed change shifts the deregistration threshold from a combination of U.S. holder percentage and trading volume to a single metric based solely on trading volume. This adjustment was necessary because the original December 2005 proposal did not fully address a trading-volume-only standard, and the reproposal incorporates feedback received during the comment period. SEC Director John White stated the new framework would provide a clear, consistent, and fair standard that better serves both U.S. investors and foreign issuers. The Commission affirmed its commitment to investor protection while recognizing the benefits of globalization and cross-border regulatory cooperation. A 30-day public comment period was proposed for the reproposed rules, with final rules anticipated in the first quarter of 2007. No allegations of fraud, misconduct, or legal penalties are associated with this regulatory initiative—it is purely a procedural update to improve market efficiency and regulatory clarity.
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- person john white
- agency the securities and exchange commission
- The Securities and Exchange Commission Announce that at its open meeting on Dec. 13, 2006, the Commission will consider a staff recommendation to repropose new rules governing when a foreign private issuer may deregister its securities under the Securities Exchange Act of 1934 and cease making filings with the Commission
- The staff Intend to recommend deregistration thresholds based solely on trading volume
- The staff Intend to recommend deregistration thresholds based solely on trading volume
- The original proposal Use thresholds based primarily on the percentage of U.S. holders, as well as trading volume
- John White Comment that the new proposal will better serve the needs of both U.S. investors and foreign issuers by providing a clear, consistent, easy-to-apply, and fair standard pursuant to which foreign registrants may withdraw from our capital markets and end their obligations to comply with our rules
- The Commission Remain Committed to investor protection as well as sensitive to the opportunities and challenges of increasing globalization and cross-border regulatory cooperation
- The proposal Continue to provide appropriate protections for U.S. investors while promoting capital formation in the U.S. and making our markets more attractive to foreign companies
- Reproposal Be Necessary because basing the threshold solely on trading volume was not addressed fully in the Commission's original December 2005 proposal and request for comment
- The reproposal Reflect modifications, in response to comments, of other conditions to deregistration outlined in the original proposal
- Staff Recommend a 30-day comment period for the reproposed rules
- Staff Expect to recommend final rules in the first quarter of 2007
Commission to Consider Recommendation to Repropose Deregistration Rules for Foreign Private Issuers FOR IMMEDIATE RELEASE 2006-202 Washington, D.C., Dec. 6, 2006 - The Securities and Exchange Commission today announced that at its open meeting on Dec. 13, 2006, the Commission will consider a staff recommendation to repropose new rules governing when a foreign private issuer may deregister its securities under the Securities Exchange Act of 1934 and cease making filings with the Commission. The staff intends to recommend deregistration thresholds based solely on trading volume. The original proposal had used thresholds based primarily on the percentage of U.S. holders, as well as trading volume. "We believe that the new proposal will better serve the needs of both U.S. investors and foreign issuers by providing a clear, consistent, easy-to-apply, and fair standard pursuant to which foreign registrants may withdraw from our capital markets and end their obligations to comply with our rules," commented John White, Director of the Commission's Division of Corporation Finance. "The Commission remains committed to investor protection as well as sensitive to the opportunities and challenges of increasing globalization and cross-border regulatory cooperation. This proposal should continue to provide appropriate protections for U.S. investors while promoting capital formation in the U.S. and making our markets more attractive to foreign companies." Reproposal is necessary because basing the threshold solely on trading volume was not addressed fully in the Commission's original December 2005 proposal and request for comment. The reproposal also will reflect modifications, in response to comments, of other conditions to deregistration outlined in the original proposal. Staff will recommend a 30-day comment period for the reproposed rules and expects to recommend final rules in the first quarter of 2007. # # # http://www.sec.gov/news/press/2006-202.htm Home | Previous Page Modified: 12/06/2006
Commission to Consider Recommendation to Repropose Deregistration Rules for Foreign Private Issuers FOR IMMEDIATE RELEASE 2006-202 Washington, D.C., Dec. 6, 2006 - The Securities and Exchange Commission today announced that at its open meeting on Dec. 13, 2006, the Commission will consider a staff recommendation to repropose new rules governing when a foreign private issuer may deregister its securities under the Securities Exchange Act of 1934 and cease making filings with the Commission. The staff intends to recommend deregistration thresholds based solely on trading volume. The original proposal had used thresholds based primarily on the percentage of U.S. holders, as well as trading volume. "We believe that the new proposal will better serve the needs of both U.S. investors and foreign issuers by providing a clear, consistent, easy-to-apply, and fair standard pursuant to which foreign registrants may withdraw from our capital markets and end their obligations to comply with our rules," commented John White, Director of the Commission's Division of Corporation Finance. "The Commission remains committed to investor protection as well as sensitive to the opportunities and challenges of increasing globalization and cross-border regulatory cooperation. This proposal should continue to provide appropriate protections for U.S. investors while promoting capital formation in the U.S. and making our markets more attractive to foreign companies." Reproposal is necessary because basing the threshold solely on trading volume was not addressed fully in the Commission's original December 2005 proposal and request for comment. The reproposal also will reflect modifications, in response to comments, of other conditions to deregistration outlined in the original proposal. Staff will recommend a 30-day comment period for the reproposed rules and expects to recommend final rules in the first quarter of 2007. # # # http://www.sec.gov/news/press/2006-202.htm Home | Previous Page Modified: 12/06/2006