What Is a Dual Listing?

A dual listing occurs when a security (or shares of a company) is listed on more than one stock exchange. It may also be referred to as cross-listing or interlisting. This method of selling shares has many benefits for companies, including increased capital and liquidity.

Dual Listing vs. Cross Listing

Cross-listing is often confused with dual listing. Both terms refer to a company listing their equity shares on a domestic and foreign exchange. However, cross-listing refers to one company listing the same stock across multiple exchanges. Dual listing occurs when two companies (functioning as one) list their individual stocks on different exchanges.

Dual Listing vs. Secondary Listing

Dual listing stocks is not the same as a secondary listing. When a company is dual-listed, it has two or more primary exchanges and must meet all reporting requirements. Secondary listing refers to cross-listing on multiple exchanges that have similar reporting requirements.

How Does Dual Listing Work?

Companies that are dual-listed function as two corporations within a single operating business. They are typically in separate countries and maintain their own legal identities and stock exchange listings. These companies can dual list their shares as long as they adhere to the exchange’s requirements and fees.

Alternatively, they may do so through American Depositary Receipts (ADRs). ADRs are a placeholder for the actual shares held in trust by a custodian bank in the company’s home country.

Dual Listing on Stock Exchange Example

Company ABC is a non-US public company and its shares are listed on the Toronto Stock Exchange. To reach a larger pool of investors, it plans to list its shares on the New York Stock Exchange (NYSE). Company ABC meets the NYSE’s listing criteria, restates its financials, and arranges for clearing and settlement of trades to satisfy US regulatory requirements.

Pros & Cons of Dual Listing

A company weighs the pros and cons of dual listing to determine if it is an appropriate course of action for their funding goals.

Advantages of Dual Listing

The following are advantages of dual listing:

  • Accesses a larger pool of investors to raise more capital

  • Appeals to investor interest in international markets

  • Increases a company’s share liquidity with additional ways to buy and sell

  • Improves a company’s public profile

  • Ability to diversify capital-raising activities

Disadvantages of Dual Listing

The following are disadvantages of dual listing:

  • Listing expenses are costly to start and maintain

  • Regulatory and accounting standards differ between exchanges

  • May require additional legal and financial resources

  • Extra attention needed by management

Famous Dual-Listed Companies

Famous examples of dual-listed companies include:

  • BHP (Australia/UK)

  • Carnival Corporation & plc (Panama/UK)

  • Investec (South Africa/UK)

  • Ninety One (South Africa/UK)

  • Rio Tinto Group (Australia/UK)

  • Unilever (UK/Netherlands)

Why Do Companies Seek Dual Listings?

Companies seek dual listings to take advantage of capital markets. They are able to offer their shares to a broader audience (which can increase the cash they take in for future goals), improve share liquidity, and help to diversify the company’s capital-raising activities.