OTC Market Offers Relief From Sarbanes-Oxley - Barron’s

July 6, 2008

Why are large foreign companies like Volvo and Bayer listed on the OTC market? Money, says Barron’s.

Sarbanes-Oxley regulations are costing companies millions to comply with. Foreign companies don’t want to pay high accounting fees for a U.S. listing, especially when London’s and Luxembourg’s depositary receipt markets are increasingly appealing. Through May 2008, more than 70 foreign companies have delisted, and more could follow. So the SEC took the historical step of allowing foreign entities to move to the OTC if less than 5% of their global trading volume came from the U.S.

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