On March 21, the US Securities and Exchange Commission voted unanimously to adopt new rule changes that will enable non-US issuers that meet specified conditions to more easily terminate the registration of their securities under the US Securities Exchange Act of 1934, and more easily extract themselves from ongoing public reporting obligations in the United States. The final rule changes are not substantially different from the relaxed rule changes re-proposed by the SEC in December 2006 (and described by us in a previous Dorsey eUpdate, on December 15, 2006). The re-proposals followed international criticism of the Commission’s original rule change proposals, which were made in 2005. Significantly, the SEC did modify the final rule changes to allow issuers to meet trading volume requirements even more easily than as re-proposed.

The SEC is expected to issue the text of the final rule changes shortly. The text will be available on the SEC’s website, at www.sec.gov. The rule changes will take effect 60 days after formal publication, which should be in time for many non-US issuers to de-register before having to file with the SEC a US-style annual report on Form 20-F for the 2006 fiscal year..

The adoption of the rule changes, along with the SEC’s responsiveness to many of the comments of the international capital markets community in developing the changes, indicates an increased willingness on the part of the SEC to listen to the concerns of non-US issuers and market participants, and an increased desire on the Commission’s part to conduct its regulatory activities with greater sensitivity in international contexts.