FTAlphavilleFT Alphaville is a 2008 Webby Award Winner

• News
• Markets Live

SGL Group, one of the world’s biggest makers of graphite and carbon fibre materials, has become the first German company to seek a delisting from the New York Stock Exchange in the wake of recent rule changes, the FT reports.
However, analysts said the German group’s move is unlikely to herald a “stampede” of  foreign companies out of US exchanges, due to the SEC’s recent moves to address their complaints about onerous compliance requirements.

The German Institute of Public Companies said the strict auditing demanded by the US Sarbanes-Oxley Act had led some of the 14 German groups with secondary listings in the US to reconsider their position. But only one of the German companies - chemicals group Altana — said it is considering following SGL’s example.

SGL, which says it has spent €3m on US compliance, became the second German group with a secondary listing in the US 11 years ago after DaimlerChrysler.

The Wiesbaden-based group on Monday said it would make use of rules approved by US authorities last week that allow a company to deregister if US trading in its stock makes up less than 5 per cent of global volume. US investors will be able to swap — free of charge — their American Depositary Receipts in SGL for ordinary shares traded on stock exchanges in Germany.

Changes proposed by the SEC to the implementation of Sarbanes-Oxley — in particular its contentious Section 404 internal controls provisions — mean compliance should become easier. The SEC is hoping to come up with final proposals as to how Section 404 and the standard that accountants should use as they audit companies for Sarbanes- Oxley compliance should be implemented.

Meanwhile, the SEC and the Public Company Accounting Oversight Board have given foreign companies and smaller US companies an extension to the deadline for complying for the first time with Section 404.