SEVERAL hundred Chinese companies have expressed an interest in floating on the Alternative Investment Market (AIM) after recent heavy lobbying by the London Stock Exchange, which runs the junior market.
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AIM Flourishes with Internationally Focused Companies
One of the more notable aspects of the success of the London Stock Exchange's Alternative Investment Market has been its ability to attract internationally focused companies. [ More ]
In response to the multi-billion dollar corporate corruption scandals involving Enron, World Com and other U.S. corporations, the U.S. Congress passed the Sarbanes - Oxley Act of 2002 (SOX) . Many consider the act to be over-regulation of the problem. Either way, the effect on small to mid-cap venture companies in particular is
Reality of U.S. Sarbannes Oxley Act (SOX)
Cost - SOX has dramatically increased the cost of corporate compliance:
The cost for a U.S. company to become SOX compliant is estimated at 5 to 6 million USD; and is even more onerous for foreign companies
Doubles or triples the cost of IPO Insurance and directors/officers liability insurance
Threat - Increased risk of personal liability claims against company directors and officers
Risk - Increased exposure to U.S. Litigation
Uncertainty - New and as yet uninterpreted legislation
Onerous - Higher proportion of Retail investors, e.g. Nasdaq has appx. 51%, means more regular, in depth and tedious reporting - Quarterly
A number of non-U.S. companies are already making moves to de-list in the US because of the burdens of SOX compliance, e.g. lastminute.com.
Download a PDF file of the Sarbanes Oxley Act and note Section 404 [ Download PDF ]