Interlisted Stock

What Is an Interlisted Stock?

An interlisted stock is one that is listed on numerous stock exchanges, normally in a company's nation of origin and at least one extra countries. Interlisting is remembered to offer a scope of benefits to the listing company, basically access to more and less expensive capital.

How Interlisted Stocks Work

A Canadian company that wanted to interlist its shares could, for instance, trade on both the Toronto Stock Exchange (TSX) and New York Stock Exchange (NYSE), given that it met the requirements of regulators in both Canada and the U.S. For instance, Sun Life Financial, a Canadian financial services company, is listed on both the NYSE and TSX, and that means investors can buy and sell shares in the company on the two exchanges.

Benefits of Interlisting

The upsides of listing on more than one exchange incorporate gaining access to additional investors and expanding a stock's liquidity, which in theory brings down the cost of raising capital. For instance, Canadian companies might need to gain more exposure to international investors by listing in the U.S. This incorporates investors outside the U.S. who buy stocks on U.S. exchanges. There are many companies listed on the TSX that are likewise listed on a U.S. exchange.

Interlisting may likewise bring issues to light of the company's brand and add to its credibility and renown, particularly on the off chance that the subsequent listing is on Wall Street.

The primary drawbacks of interlisting remember the cost of listing for more than one exchange and conceivable extra and harder regulatory requirements in the subsequent country.

Many companies have shares that trade on exchanges in several countries. CNOOC Ltd., a Chinese energy producer, is listed in Hong Kong, New York, and Toronto.

Interlisting, Cross-Listing, and Dual Listing

The term interlisting is usually utilized in Canada. It is otherwise called cross-listing there and somewhere else and is some of the time alluded to as dual listing. In any case, dual listing likewise alludes to an arrangement by which two companies function as one entity yet keep up with separate listings, quite often in various countries. Models incorporate BHP, Rio Tinto Group and Unilever. This type of dual listing is generally the consequence of a merger.

Arbitrage and Interlisted Stocks

It is workable for exceptionally sophisticated traders to profit from deviations in share prices of interlisted stocks on the various exchanges or the currencies of the countries in which they are listed. This is called arbitrage and is a confounded, high-risk trade that relies upon prices ultimately meeting.

Features

• The primary benefit of interlisting for the company is gaining exposure to additional investors and capital.
• An interlisted stock is one that is listed on more than one exchange, as a rule in a company's nation of origin and at least one extra countries.
• Interlisting is otherwise called cross-listing and is at times alluded to as dual listing, albeit the term dual listing can have a somewhat unique significance.