US banks are assessing the possible impact that the Jobs Act might have in encouraging Latin American companies that are planning an IPO to conduct a dual listing strategy.
The legislation eases the regulatory and disclosure requirements for Emerging Growth Companies (EGC) companies listing in the US. ECGs are companies with less than $1 billion in revenues and can be based abroad.
ECM bankers in New York have regularly complained that the local investment banks in the region, and particularly those in Brazil, have been successful in dissuading IPO candidates from doing dual listings or SEC-registered transactions because of the extra disclosure requirements. SEC-registered deal also place foreign companies under the purview of the US regulators and Sarbanes-Oxley.
“I think it’s very interesting how few dual-listed companies there are in Brazil and the Jobs act could be a catalyst for more dual listings,” says Christopher Harland, Morgan Stanley’s chairman of Latin America, which is one of the banks looking at the likely impact of the Jobs Act on Latin American corporates’ IPO strategies.
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