Karin Stiles

Chris Lo

Establishing a DR Program

Issuer Develops team of advisors

Investment Bank

LawyerDepositary

BankAccountant

Investment Bank

Advise on type of DR’s and the market on which to launch them.

Advise on the ratio of DR’s to ordinary shares.

Prepare research reports on the issuer.

Promote DR’s to investors via meetings and roadshows.

Lawyer

Prepare contracts between the issuer and other intermediaries.

File the required registration statements with the host market regulatory authorities.

Manage compliance with the host market laws and regulations.

Accountant

Prepare issuers financial statements according to the standards required in the host market.

Depositary Bank

Issues DR’s on the basis of issuer’s shares held in custody by a custodian bank in the home market of the issuer.

Arranges relationships with market makers and brokers who sell DR’s to investors in the host market.

Also plays a key role in day-to-day management of a DR program by maintaining a register of DR holders, processing dividend payments for them, and keeping them informed about corporate actions of the issuer.

Depositary Bank/Sponsors

Key intermediaries for foreign transactions.

Table 4 uses data from capital raising events between 1990 and May 2009 by incorporated companies in BRIC.

359 accounts used DR’s 35% of total number of such events in

the world. 40% of the total value.

**Honk Kong only had 3 capital raising events, data aggregated into China on table 4.

Merrill Lynch (ML)

Credit Suisse (CS)

Citibank (CITI)

Morgan Stanley

(MS)

Goldman Sachs (GS)

46% of issues

Very strong presence in China, but weak to no presence in India, Russia or

Brazil. Activities have since tripled

Presence in all markets. Activities have tripled since 1990

Equal presence in all markets. Since end of 2000, have 13X more issues

than they did from 1990-2000

Since the end of 2000, have 7X more issues than they did from 1990-2000

Big market share in China, but weak or no presence in Russia. Activities have

since tripled

Host Markets

LSE – London Stock ExchangeLUX – Luxembourg Stock Exchange

NASDAQ - National Association of Securities Dealers Automated QuotationsNYSE – New York Stock Exchange

OTC – Over The Counter

Summary of Intermediaries in Foreign Listings

The services of depositary banking and lead management are key to foreign listings

It is dominated by only a handful of institutions

All leading intermediaries are international, although exhibit a degree of specialization in regards to size, country and service

Relationships

Destinations of foreign listings

Destinations of foreign listingsNew York(NYSE and NASDAQ) and London(LSE) are the main centers of foreign listings

Main LUX Markets Technology Industrials Consumer goods

Main LSE Markets Oil & Gas Basic materials Utilities

Main NASDAQ Markets: Technology Consumer services

Main NYSE Markets: Telecommunications Health care

Factors of distribution

Direct and indirect costsNYS and LSE are most expensive

Requirements in Reporting and Corporate GovernanceSEC Filing & US GAAP

Industrial specialization Proximity(nearness in place)

Conclusion

Foreign listing will remain an important factor in influencing the map of the world economy

Author’s argument: a combination of the world city network and geography finance approaches

Test Question:

What are some of the reasons why a company would choose not to list on the NYSE, NASDAQ or

LSE(London Stock Exchange)?

Test Question

Test Question:Explain one of the reasons why a company would choose not to list on the NYSE, NASDAQ or LSE(London Stock Exchange)?

Answer(Choose 1!):1.Cost: It is expensive to list stocks on the NYSE, NASDAQ, and LSE

2.Requirements and Corporate Governance: If you intend to have your stock listed on the NYSE you need to have SEC Filing and abide by US GAAP.

3.Industrial Specialization: Some stock exchanges have specialization in a certain industry and it may be beneficial to have your company’s stock in the same stock exchange for name exposure purposes.