Prepare to list

The history of cross-listed securities goes back to the 1920s, but there has been a dramatic increase in them, particularly in the US and the UK, since the nineties. Between 1990 and 2000, the number of foreign corporations listed on the NYSE and Nasdaq increased by 450%. Depository receipt programmes increased by more than 500% during the same period. The original programme allowed US investors to register and earn dividends on non-US stock without direct access to the overseas market itself, enabling them to acquire underlying shares in the form of depository receipts. At the moment, cross-border investment programmes are prevalent in foreign capital markets, allowing prospective issuing companies (irrespective of location) a vehicle to generate liquidity that would previously have been unavailable. Such programmes have become attractive to corporations and companies listed on domestic stock exchanges in emerging markets (Brazil, Russia, India and China, for instance). This has led...