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Telekom Austria, Vernalis Plan to Delist From U.S. Exchanges

European companies are already signaling their intent to take advantage of a pending change in rules that will let them easily cancel U.S. stock listings and escape the regulatory constraints of the Securities and Exchange Commission and the Sarbanes-Oxley Act.

Telekom Austria AG and Vernalis PLC, a small Great Britain-based pharmaceuticals company, Tuesday said they plan to delist and deregister from U.S. markets when the rules change on June 4, saying the cost of listing outweighs any benefit. Earlier this month, European staffing giant Adecco SA announced similar plans.

Telekom Austria is listed on the New York Stock Exchange; Vernalis trades on Nasdaq. Both also trade in their respective home countries.

The moves come as U.S. financial officials, including Treasury Secretary Henry Paulson, grapple with what they see as the shrinking competitiveness of U.S. financial markets. Other stock exchanges, particularly in London and Hong Kong, are winning initial public offerings that previously might have gone to the NYSE or Nasdaq.

Yahoo!Finance: European Cos. Exit U.S. Exchanges

Attempts to overturn portions of Sarbanes-Oxley may pick up steam this week after an April 4 report showed the value of European stock markets has overtaken U.S. markets for the first time since World War I.

The seismic shift in the value of equity markets is a further blow to the New York Stock Exchange and other U.S. markets, which have seen some of the larger initial public offerings opt for overseas markets instead of their traditional NYSE home.

Critics of SarbOx blame the recent regulation for pushing the IPOs abroad. They claim the legislation makes compliance in the U.S. too costly.

Europe, if you are a stock investor, is now bigger than the US. The landmark, passed last week, has been achieved despite the retirement of a net EU107.1bn (£72.4bn) in European equity over the past two years, according to Citigroup (NYSE:C - news). Its import goes far beyond the noise over the impact of Sarbanes-Oxley corporate governance rules.

That said, there are caveats. First, the definition of “Europe” is one that economists, market analysts, or even geographers would not normally recognise. It covers all of “emerging Europe” - including Turkey and Russia. This is “Europe plus Siberia and Anatolia”. By crossing the Urals, “Europe” includes Russia’s fuel reserves. By crossing the Bosphorus, it gains the Turkish economy, currently growing at more than 6 per cent. The population of this “Europe” is about 2.5 times that of the US. North America, including Canada and Mexico, might be a better comparison.

Yahoo!: European stocks top US

Nicor Inc. (NYSE:GAS) today announced that it has reached a settlement agreement with the United States Securities and Exchange Commission (”SEC”) resolving charges filed today against the company in connection with the SEC’s investigation of the results of the company. The company had announced in 2002 that the SEC had begun a formal investigation in connection with the accounting for natural gas costs pursuant to the Performance-Based Rate plan, which was in effect from 2000 to 2002 at Nicor Gas Company, the company’s gas distribution subsidiary.

Under the settlement, Nicor has agreed, without admitting or denying any wrongdoing, not to violate in the future provisions of the United States securities laws. The settlement also requires the company to pay disgorgement of one dollar and a penalty of $10 million, a portion of which may be designated for use for a Fair Fund, as authorized under the Sarbanes-Oxley Act. As previously announced, Nicor recorded a charge of $10 million to its 2006 second quarter earnings in connection with the penalty to be paid to the SEC.

Morningstar.com: United States Securities and Exchange Commission Approves Nicor Settlement

A vast transatlantic stock market emerged on Tuesday when the New York Stock Exchange won control of pan-European market operator Euronext, creating an entity worth 29 billion dollars linking trading platforms in six cities.

The two markets said in a statement that the NYSE had acquired 91.42 percent of Euronext capital and 92.22 percent of the voting rights according to a provisional tally of shareholder acceptances.

The new leviathan, creating the first inter-continental stock market capitalised at about 22 billion euros, will bring markets in New York, Paris, Brussels, Amsterdam and Lisbon under one group and will also include the Liffe financial futures market in London.

A vital point is that companies quoted on each market will continue to operate under existing regulations. European companies will not be affected by severe accounting rules, as stipulated by the Sarbanes-Oxley legislation, which are much criticised in the United States for increasing costs on quoted comapnies.

Yahoo: NYSE buys Euronext, forming first inter-continental stock market

The Asia Tigers Fund, Inc. (NYSE: GRR; the “Fund”) reports to stockholders that its Chief Executive Officer has submitted to the New York Stock Exchange his required annual certification for 2006 and that the Fund has included the certifications of its Chief Executive Officer and Chief Compliance Officer, as required by Section 302 of the Sarbanes-Oxley Act, in the Fund’s Form N-CSR containing the Fund’s annual report for the fiscal year ended October 31, 2006, which was filed with the Securities and Exchange Commission on December 29, 2006. Although the Fund’s annual report did not include this information, these certifications were appropriately filed as required.

Yahoo: Asia Tigers Fund NYSE Certification

The head of the New York Stock Exchange has launched a blistering attack on the lack of regulation surrounding the London Stock Exchange’s junior Aim market.

John Thain, chief executive of the NYSE, criticised the junior market for its lack of corporate governance standards. Mr Thain, speaking at the World Economic Forum in Davos, Switzerland, said he felt Aim “did not have any standards at all and anyone could list”.

Although he believed it was beginning to change its approach, he added that London “had to be careful not to damage its reputation by allowing in companies that are not well run”.

He also said that he felt that neither the LSE’s Official List nor Aim had such a strict approach to corporate governance as his own NYSE or Nasdaq, which is currently trying to buy the LSE. Many in London do not want an American takeover because they fear overly-stringent regulations, such as Sarbanes-Oxley, may be forced to apply to UK-quoted companies.

Telegraph.co.uk: NYSE chief attacks Aim

Hong Kong surged past New York this year and became the world’s second most popular place _ after London _ for companies to float new stock listings.

The city’s amazing success was due to several factors, analysts say. Being next door to mainland China’s booming economy was a huge help. Tough new U.S. accounting rules have discouraged many companies from listing in America.

Hong Kong’s big advantage now is that it has a solid legal and financial system that can handle big initial public offerings, or IPOs. Shanghai isn’t close to being able to match this city, and that’s why a parade of China’s biggest banks decided to launch record-breaking IPOs in Hong Kong this year.

One of them was the world’s biggest ever: the $21.9 billion offering in October by Industrial & Commercial Bank of China, the mainland’s largest lender.

With two weeks left in the year, Hong Kong has raked in HK$307.7 billion, or US$39.57 billion, in IPOs _ nearly twice as much as the HK$165.7 billion raised last year, according to Hong Kong Exchanges & Clearing Ltd., the listed firm that operates the stock exchange.

London was the world leader for IPO equity raised, with $48.92 billion raised, according to the World Federation of Exchanges. Hong Kong was second and the New York Stock Exchange lagged back in third with $33.61 billion, according to the most recent WFE figures, which included the January-November period.

That may be partly because some American companies are holding back from listing in the U.S. due to the strict rules under the Sarbanes-Oxley anti-fraud law, opting instead to stay private.

Washingtonpost.com: Hong Kong Passes NYC in Attracting IPOs

SPIRENT, the telecoms testing group, yesterday blamed the cost of meeting tough new corporate governance rules in America for its plan to drop its New York listing.

The company, which has its primary listing in London, said that the Sarbanes-Oxley rules, introduced after the Enron collapse to regulate US-listed businesses better, were costing it too much.

Times Online: Cost of meeting new regulations inspires Spirent to quit NYSE

German Financial News Portal Finanznachrichten says that regulators are working on adding a Anti-Sarbanes-Oxley clause to the merger deal between Euronext NV and NYSE Group. This clause may comprise that the deal would break up if someone attempt to apply the SOX reporting rules to companies listed on the combined group’s European exchanges.

Dr. Morici, has written a great comment about this issue.