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Capital Markets Law Journal Advance Access originally published online on November 27, 2008
Capital Markets Law Journal 2009 4(1):6-31; doi:10.1093/cmlj/kmn032
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© The Author (2008). Published by Oxford University Press. All rights reserved. For Permissions, please email: journals.permissions@oxfordjournals.org

The attack on national regulation: why we need a global framework for domestic regulation

Edward F. Greene and Omer S. Oztan*
* Edward F. Greene is General Counsel, and Omer S. Oztan is a Counsel, of Citi Institutional Clients Group. The views expressed in this article are those of the authors and are not necessarily the views of Citi Institutional Clients Group or Citigroup Inc. (E-mail: omer.oztan@citi.com)

The first 150 words of the full text of this article appear below.


Key points

  • In regulating cross-border capital markets transactions, regulators are employing either an exemptive approach, or a unilateral or mutual recognition approach. The exemptive approach allows market participants wherever located to transact business in the host countries without complying with local requirements. The recognition approach is limited to a particular market, but is more expansive in terms of access to host country investors. In regulating cross-border transactions, the SEC has traditionally relied on the exemptive approach, and has restricted participation to only the largest, most sophisticated US investors. Recently, it has moved to a mutual recognition approach with its agreement with Australia, which allows a broader range of US investors to conduct cross-border transactions with Australian exchanges and broker–dealers relying almost entirely on the adequacy of the Australian regulatory system. However, both its exemptive approach and mutual recognition approach deal only with secondary market transactions, not participation in offerings.
  • While . . . [Full Text of this Article]

 

   1. Introduction
 

   2. Differences between exemption and recognition
 

   3. SEC's cross-border regulatory efforts: Rule 15a-6 and mutual recognition
 
Broker–dealer registration
Rule 15a-6 currently
Proposed Rule 15a-6 amendments
SEC mutual recognition efforts
Access by exchanges
Access by broker–dealers
Disclosure requirements
Exemptive process
Enhanced enforcement MOU and supervisory MOU
Other aspects of the Framework
Scope

   4. Limits to the SEC's exemptive and recognition efforts
 
Regulatory arbitrage
Scope of market participants
Scope of investors

   5. Issues raised by the SEC's approach
 
Limits on scope of market participants under the Framework
SEC efforts to prevent ‘Regulatory Arbitrage’

   6. Need for a Framework
 
Expand mutual recognition efforts to include non-US issuers
Enhanced enforcement protections
Use all available tools—SIFMA/IIF Framework
Benefits of a Framework approach

   7. Conclusion
 

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