Foreign companies check out from U.S. markets

About 35 foreign companies have voluntarily announced plans to delist their stocks from U.S. exchanges since April, according to U.S. regulatory filings.

The companies say multiple accounting standards, Sarbanes-Oxley compliance, low trading volume, and a new rule that eased requirements to de-register shares with U.S. regulators all contributed to their decisions to delist.

But their departures also highlight how much trading activity U.S. investors have taken overseas as global markets have improved.

U.S. investors, it seems, have grown less fond of the 80-year-old American depositary receipt (ADR), which is widely used to trade foreign stocks in the United States, and instead are exhibiting a growing preference to buy stocks directly in local markets abroad.

"The benefit of coming here has decreased, and the costs have increased with litigation and regulation, so they're making a trade-off to get out of here," said Hal Scott, a Harvard Law School Professor and director of the Committee on Capital Markets Regulation, which has spearheaded complaints about the decline in foreign IPOs.

Some of those delisting from U.S. exchanges are well-established, global names like British Airways Plc and French food group Danone.

Others, such as Japanese insurer Millea Holdings Inc., are ending decades-old listings. Millea said on Thursday it would drop a depositary program it began in 1963.

Most of the companies said they would continue to allow their shares to trade in the over-the-counter market, but they will no longer be forced to comply with the requirements of the New York Stock Exchange, the Nasdaq or the U.S. Securities and Exchange Commission.

"U.S. capital markets represent sort of the blue-ribbon market in terms of governance standards around the world for companies," said Andrew Karolyi, a professor at Ohio State University's Fisher School of Business. "These companies are basically packing up their shop and going home ... I wonder, are they being short-sighted?"