In an attempt to make U.S. financial markets more attractive for foreign firms, a new Securities and Exchange Commission deregulation effort post-Sarbanes-Oxley has had the opposite effect. The outcome has been that one of the historically-rarest type of cross-listing is now the most prevalent, courtesy of depositary banks creating unsponsored American deposit receipts (ADRs). New research by Finance’s Caruth Chair Darius Miller of SMU Cox and co-authors reveals that the majority of foreign firms are now trading on Over-The-Counter (OTC) markets rather than major exchanges, to their detriment.

In the quest for higher returns and more diversification, investors turn to global bond markets. But investing in bonds from foreign countries, especially ones with less stringent laws and regulations, leaves the investor open to more risk. Is there a way to mitigate some of the risk, a “work-around” possibly? New research by Darius Miller and Natalie Reisel of SMU Cox shows how bonds issued from firms in weak investor regime countries can offer investors another path to protect their investments.