Regulation of Cross-border Share Offerings: Trends towards Multi-jurisdictional Securities Laws

Abstract

Technology has made the world a smaller and more integrated world for investors and firms seeking capital through public offerings. Investors and issuers across the globe now invest and raise capital in foreign markets through international portfolio investment. Indeed, there is an accelerating pace of such transnational investing and offerings. An important component of these developments are the scope of mandatory disclosure requirements that issuers must satisfy to list their securities for trading or to conduct their offerings in a country.Under the current system of securities law, issuers need to comply with the disclosure requirements prescribed by the regulations of the country in which it proposes to make the share offerings. The rapid growth in international portfolio investment and globalization has forced us reexamine the fundamental premise of regulation: the territorially based scope of national securities laws. The benefits of cross-border share offerings have triggered the search for an alternative system of securities law, which would encourage the growth cross-border portfolio investments.There are three different approaches that have been promulgated by researchers namely, multinational/trans-national regulations approach, multiple disclosure standards approach and uniform minimum disclosure approach. Recently, there have been a few instances of practical applications of these approaches, the most noteworthy of which are the single European market plan and the IOSCO proposal. This article attempts to bring forth the salient features of these two attempts; and in conclusion it is hoped that other nations are inspired from these two examples and aspire to establish a uniform disclosure norm for public share offering across the globe.