U.S. exchanges are getting more and more foreign listings, even if there's some concern about their missing out on the biggest ones.

During the first quarter, 19% of the 67 initial public offerings on the New York Stock Exchange ( NYX), the Nasdaq Stock Market ( NDAQ) and the American Stock Exchange were foreign-based, according to Dealogic. That's up from 16% for all of last year.

This year is on pace to add the most foreign listings on U.S. exchanges since 1997, when 86 overseas companies completed IPOs in U.S. markets, according to Thomson Financial. Foreign companies accounted for 23.4% of IPO proceeds last year -- the highest since 1994, Thomson Financial says.

The gains come in spite of worries about U.S. securities laws possibly scaring away big foreign deals. China Construction Bank raised eyebrows in late 2005 when it raised $9.2 billion in an IPO on the Hong Kong Stock Exchange. The Industrial and Commercial Bank of China made history just last November when it raised $22 billion through listing shares in Hong Kong and Shanghai.

Observers cite the growth of Asian and emerging markets in general. U.S. investors want more international exposure, particularly from companies based in fast-growing countries such as China and India.

"U.S. investors might be willing to pay a higher value than domestic investors" for foreign companies, says Jay Ritter, a finance professor at the University of Florida. Ritter says the globalization of the capital markets and improved clearing at many exchanges are adding to the foreign-listing appeal.

For the most part, foreign companies are doing fairly small IPOs and are primarily in the healthcare, tech and media sectors.

Shares of Chinese solar power company JA Solar ( JASO) rose 18.6% on their first day of trading in early February and are up 30% to date from its IPO price, Dealogic says. Greek tanker operator Capital Product Partners ( CPLP) jumped 24% in its debut and has since held steady.

But every deal hasn't been a success. Shares of Israeli cell phone company Cellcom Israel ( CEL) fell 2.3% in their February debut and are down 7% from the IPO price, Dealogic says. Chinese media and advertising company Xinhua Finance Media ( XFML) dropped 12.6% in its March 9 debut and is off 21% from the IPO price.

Still, Charlotte Crosswell, head of Nasdaq's international listings efforts, says the exchange has seen "certainly a lot more interest from other parts of Asia," including Korea, Taiwan and Vietnam.

As a result, Nasdaq is devoting more resources to persuade these companies to list on the exchange. Nasdaq recently hired Michael Oxley, the former congressman, as vice chairman to boost listings.

"We believe those new markets will hopefully build out our pipeline over the next few years," Crosswell says.

NYSE is also looking to gobble up more foreign issue listings. The Big Board is heavily promoting its sister exchange, NYSE Arca, which is targeting smaller companies that might not be able to meet the requirements of the main exchange. But even those companies that do not want to list on either U.S. exchange will now have a third option -- Euronext. NYSE completed its merger with the European exchange operator on Wednesday.

Some foreign companies are already warming up to the corporate governance rules under Sarbanes-Oxley, despite claims in some quarters that the rules are a deterrent to listing in the U.S. Some smaller companies have been choosing exchanges with less rigorous regulatory requirements, such as the London Stock Exchange's Alternative Investments Market.

Many U.S. issuers have whined about the high cost and cumbersome rules associated with Section 404 of Sarbanes-Oxley, which mandates extensive regular reviews of companies' internal controls.

But a foreign company that proves it is willing to comply with the U.S. rules and regulations is likely to get better access to capital, Crosswell says.

"In China there is a more neutral perception of Sarbanes-Oxley," she says. "The companies here are slightly younger and have been putting in process and controls at a very early stage. The process hasn't affected them as much as big multinationals that had to start from scratch."

The path might also be getting easier for companies to comply with Sarbanes-Oxley. The Securities and Exchange Commission is working to ease some of the costs associated with Section 404.

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