Abstract
This study explores the financial impact of the Canadian Bill 198on seasoned equity offerings by Canadian firms –cross-listed in major U.S. stock exchanges and those listed in the Toronto Stock Exchange only (non-cross-listed). Canadian Bill 198, also called Canadian SOX, became effective in December 2005. It finds the market reaction to all offer announcements is not different between the period 1999-2005 (pre-Bill) and the period 2006-2011 (post-Bill). When distinguishing offers by cross-listed and matched non-cross-listed firms, the market reaction is also not significantly different between the pre- and the post-Bill periods, after conditioning for offer and firm characteristics. On the other hand, when distinguishing offers by underwriting method (marketed underwritten versus bought deals), the market reaction is less positive for marketed underwritten offers than bought deals for the post-Bill period only –mostly for noncross-listed firms. This may explain why marketed underwritten offers have decreased significantly as a choice for underwriting seasoned equity offerings in the last years.
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