Global Capital Markets Center
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Professor Jim Cox 16 Hastings Int'l & Comp. L. Rev. 149 (1993) |
ABSTRACT:
It is frequently considered that the U.S. Securities Act of 1933 and the Securities Exchange Act of 1934 are the foundation of Japan's securities laws. Nevertheless, the regulation of securities markets vastly differs between the U.S. and Japan. It is well documented that the U.S. mandatory disclosure requirements are far more demanding in breadth and detail than those of Japan and other developed countries. As capital markets have become more and more international, pressures have mounted to standardize both disclosure rules and market practices to facilitate access to markets and to foster greater efficiency. U.S. policy makers, however, envision this as a game in which the other nations of the world should raise the level of their disclosure rules rather than the U.S. lowering its own disclosure requirements. Japan is a country that has earned special attention in this regard. Although the Tokyo Stock Exchange is the largest securities exchange in the world in terms of market capitalization, there is wide distrust, both inside and outside of Japan, of its securities markets. Not surprisingly, the U.S. Government has pressured Japan to reform its securities laws and increase enforcement efforts. This article suggests a framework to assist the governments of Japan and the U.S. in their continuing negotiations over what differences in disclosure and enforcement are acceptable to both countries. The author proposes such a framework for efficient regulatory competition between the two countries' markets and argues that a good deal of diversity can coexist within mutually agreed upon principles for fair competitive regulation.
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