Cross border listings
What are cross border listings?
They are when a company lists its common shares on a stock exchange, other than its primary and original exchange. Doing this means the shares can be traded in multiple time zones and multiple currencies, giving the issuing company more liquidity.
Where have you heard about cross border listings?
Asian and European-based companies often choose to list their shares on US exchanges such as the New York Stock Exchange. Recent cross border listings on the NYSE that you may have heard about include Alibaba Group, Mobileye and Shopify.
What you need to know about cross border listings.
To be approved for cross listing, a company has to meet the same requirements as any other listed member of the exchange - for example, accounting policies and filing requirements for financial reports. The adoption of the Sarbanes-Oxley Act has made cross-listing on US exchanges costlier, with its heavy stress on corporate governance and accountability.
One advantage of cross border listing is that the financing of the firm increases, i.e. its market capitalisation will spike. Cross listing on markets with stricter financial disclosure can also enhance a company's business reputation.