Global Capital Markets Center
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Professor Jim Cox 55 Law & Contemp. Prob. 157 (1992) |
ABSTRACT:
This article offers a unique perspective on the concerns posed by the internationalization of our securities markets. Rather than considering how the securities laws of the United States impact international securities transactions, Professor Cox purports to develop a set of principles that can guide U.S. policymakers in reaching agreement with other nations on the minimum content of all nations' securities laws. The author argues that U.S. issuers and markets are disadvantaged by the greater regulatory demands U.S. securities laws impose as compared with the relatively light regulation foreign governments impose on their issuers and markets. Thus, a wholesale revolution in domestic securities laws is necessary to meet the global competition. This article urges the United States to meet that global challenge and sets forth principles to meet it without resort to a "race to the bottom." The article illustrated that regulatory competition is healthy, provided the points in competition do not afford opportunities for managerial opportunism. The author argues that the United States should avoid those accommodations that have the perverse effect of driving securities transactions to foreign markets. Therefore United States must begin the wholesale review of the content of both its disclosure requirements and antifraud rules. The former cannot be relaxed effectively unless the demands of the express and implied causes of action under the securities laws are effectively narrowed. If this can be done, then Regulations S-X and S-K can be reviewed to identify those areas where mandatory disclosure requirements are necessary in light of the otherwise weak incentives managers have to disclose financially significant information. This article is significant in that it emphasizes the importance of the development of principles that provide a framework within which the United States can better meet the global challenge and, at the same time, preserve the protection investors currently enjoy under the securities laws.
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