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Simple English definitions for legal terms
deregistration
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A quick definition of deregistration:
Deregistration is when a company no longer needs to be registered with the Securities Exchange Act of 1934 because there are not enough people holding the company's securities. This is different from delisting, which is when a company's securities are removed from a stock exchange.
A more thorough explanation:
Definition: Deregistration is the process by which an issuer's registration under § 12 of the Securities Exchange Act of 1934 is no longer required due to a decrease in the number of holders of the issuer's securities.
For example, if a company has fewer than 300 shareholders of record, it may be eligible to deregister with the Securities and Exchange Commission (SEC) and stop filing regular reports.
This means that the company will no longer be required to comply with certain SEC regulations and can save money on compliance costs. However, it also means that investors may have less information about the company's financial performance and operations.