Arguments Against Cross Border Listing

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One of the strongest arguments against cross-border listing of a stock would be that it can sometimes be very costly to meet the disclosure and listing requirements that are imposed by the foreign exchange and regulatory authorities of the country that it is being cross-border listed in. This can be seen here in the United States. Many foreign companies choose not to cross-list in the U.S. because of the SEC and the rules and regulations that are imposed on stocks listed on the NYSE. The second major argument against cross-listing a stock would be that once a company’s stock is made available to foreigners, the foreigners might acquire a controlling interest and challenge the domestic control of the company. In fact because of this fear, some governments in both developed and developing countries have imposed restrictions on the maximum percentage ownership of local firms by foreigners. Some examples would be India, Mexico and Thailand where foreigners are only allowed to own up to 49 percent of the outstanding shares of a local firm. 2. To begin with market segmentation: if c...

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