According to this CFO.com article, London Stock Exchange listed companies are concerned that the acquisition of the LSE by a U.S. exchange will subject the companies to SOX (recall that Nasdaq’s $4.2 billion unsolicited bid for the LSE was rejected but it has since acquired 24% of LSE shares). And LSE companies should be concerned considering the high costs of SOX compliance but questionable benefits. However, according to the article:
Callum McCarthy, chairman of Britain’s Financial Services Authority, stated that the FSA and the Securities and Exchange Commission agree that U.S. ownership of the LSE would not “in and of itself” mean that U.S. regulations would apply to LSE-listed or -quoted companies . . . .
The statement could have certainly gone further in comforting LSE companies. They can, however, take more comfort from market realities. If the Nasdaq were to acquire the LSE, it would do everything possible to keep it outside the reach of SOX. A primary objective of Nasdaq acquiring a foreign exchange is to be able to provide a non-SOX listing option so that it can get a piece of the increasing number of deals now being done outside of the U.S. in large part due to SOX. As the W$J recently noted (see here):
In 2000, nine of every 10 dollars raised by non-U.S. companies through new stock offerings were raised in the U.S. Last year the reverse was true: nine of every 10 dollars were raised abroad.
