Delisted Stocks and Deregistered Stocks

Stocks that may 'disappear' from a stock exchange listing!

Delisted stocks include those that have been removed from, or no longer quoted on a stock exchange list of stocks. There may be a number of possible reasons for this.

They may have been acquired by another company, they may have merged with another company, or they may have become insolvent.

Companies may also change names with the old name delisted and their new name listed.


Deregistered Stocks

Deregistered stocks (as distinct from delisted stocks) are stocks that no longer exist. Deregistration is the final act. The company is removed from the official records as a registered company. The stock has no value.

Deregistration is recognized as a capital gains tax event in some countries. When it happens, shareholders may be able to crystallize a capital loss for tax purposes.


Stock Exchange Rules

Stock exchanges have their own listing rules and delisting rules. Some of the reasons a company may be removed from the official stock exchange list include ...

• it breaks a listing rule
• it asks to be removed
• it fails to pay listing fees
• it has no quoted stock
• some other appropriate reason.

Stocks No Longer Quoted

A stock that is no longer quoted, and is not traded ...

• may have been temporarily suspended because a take over is under way or because a major announcement is imminent
• may have gone into administration and a loss declaration has been issued
• could be in liquidation and a loss declaration has been issued in previous years
• could have been deregistered and a capital loss may be claimed.

Websites associated with stock exchanges in different countries around the world provide lists of delisted and deregistered stocks. They can be found by searching on the web for 'delisted stocks' and 'deregistered stocks' in the country of interest.


To Conclude

Following a value investing approach in managing a portfolio provides some protection from purchasing stock that may go into liquidation at a later date.

It is still important for investors to be aware of the process of delisting and deregistration of stocks. The reason being that it may be possible to declare a capital loss in a tax return if a stock has been delisted and later deregistered.

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