This paper explores the effects of Canadian SOX (CSOX) on investment banking fees for seasoned equity offerings of Canadian issuers. Canadian SOX is a Canadian law equivalent to the U.S. Sarbanes-Oxley (USSOX) of 2002 aimed in improved financial disclosure of public corporations. It finds the investment banking fees to all offer announcements are not different between the period 1999-2005 (pre-CSOX) and the period 2006-2011 (post-CSOX). When comparing offers by Canadian issuers cross-listed in major U.S. exchanges with matched non-cross-listed issuers, the fees are higher for the former during the post-CSOX period only, after controlling for offer, firm and trade variables. Additionally, when comparing offers between marketed underwritten with bought deals, the fees are higher for marketed underwritten offers in the pre- and post-CSOX periods, respectively, – mostly for non-cross-listed issuers. This may justify why firms prefer issuing bought deals instead of marketed underwritten offers in the last years.
Investment Banking Fees, Seasoned Equity Offerings, Canadian SOX, Sarbanes-Oxley Act, Cross-Listed, Bought Deals, Marketed Underwritten Offers.