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Cross listing

Cross listing

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CROSS LISTING

Cross-listing is the listing of a company's common shares on a different exchange than its primary and

original stock exchange.

To be approved for cross-listing, the company in question must meet the same requirements as any

other listed member of the exchange with regard to accounting policies. These requirements include the

initial filing and ongoing filings with regulators, a minimum number of shareholders, and minimum

capitalization.

The term cross-listing is often in reference to foreign-based companies that choose to list their shares on

U.S.-based exchanges like the New York Stock Exchange (NYSE). But firms based in the U.S. may choose

to cross-list on European or Asian exchanges to gain more access to an overseas investor base.

There are 5 MOTIVES that a firm's typically tries to accomplish one or more of this.

TO IMPROVE LIQUIDITY

• The company can improve the liquidity of it's existing shares at the same time, find and support a

liquid secondary market for new equity issues in foreign markets. In order to maximize liquidity, the firm

ideally should cross list and issue equity in more liquid markets in other countries or regions. More

source for investors money, the better for the company.

TO INCREASE ITS SHARE PRICE

• when you cross listing means your trying to increase the company's share by defeating mispricing in a

segmented and capital market. In more liquid market or region in where share are cross listed not only

that the company has fresh source of funds but also the company's share marketability is enhanced.

TO INCREASED FIRM'S VISIBILITY AND ACCEPTANCE

• cross listing increases firms visibility and acceptance to it's customers, supplier, creditors and host

government. Cross listing in the foreign markets gives the company the chance to enhance corporate

image, to expose and advertise trademarks and producys, to get better local press attention and more

importantly, to become more familiar with the financial community.

TO SUPPORT TAKEOVER BIDS

• cross listing can be one of the initial steps in establishing a secondary market for shares to be used to

acquire other firms in the host countries or markets. Company offer their shares as partial payment and

it is significantly more attractive if those shares have a liquid secondary market in other regions. High

liquidity level in the market can be noted when the firm can issue new securities without any noticeable

traces of depression interms of market price resulting from the new issuance.

TO SUPPORT SHARE AND OPTIONS PLANS

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CROSS LISTING Cross-listing is the listing of a company's common shares on a different exchange than its primary and original stock exchange. To be approved for cross-listing, the company in question must meet the same requirements as any other listed member of the exchange with regard to accounting policies. These requirements include the initial filing and ongoing filings with regulators, a minimum number of shareholders, and minimum capitalization. The term cross-listing is often in reference to foreign-based companies that choose to list their shares on U.S.-based exchanges like the New Y ...
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