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Abstract:
Leading scholars have lamented for nearly a decade the absence of what can be termed a market for securities laws. In contrast to U.S. corporate law, which is said to prompt competition among states for charters, no competition for issuers animates the enactment of federal securities laws. Indeed, the conventional view is that the U.S. government has enjoyed a virtual monopoly over securities laws since the passing of the 1933 Securities Act. In response, academics such as Roberta Romano, Andrew Guzman, and Stephen Choi have proposed a variety of reforms aimed at generating competition among securities regulators by giving either issuers or stock exchanges expanded choice as to the legal regime governing their securities transactions.

This Article argues that these proposals fail to take account of dramatic changes in the structure and operation of stock exchanges that are already making possible a vibrant market for securities laws. First, the Article identifies what can be viewed as a 'public' market for securities laws. In this market, the services offered by stock exchanges are increasingly commoditized as exchanges transition from floor trading to electronic trading. As a result, national regulators eager to protect or expand their financial centers are incentivized to provide attractive rules for securities issuances. Second, the Article demonstrates how the acquisition of foreign competitors by U.S. stock exchanges has created a nascent 'private' market for securities laws. The Article shows that by merging with foreign competitors, stock exchanges are now able offer firms greater choice as to where their securities will be sold, and, as a result, greater choice over the regulatory regime governing their offerings. The Article then assesses the degree of regulatory competition created by these new markets for securities laws by comparing them to the reform proposals advanced by the critics of the current securities law regime.

Regulatory Competition, Stock Exchanges, ECNs, NYSE, Euronext, Nasdaq, Issuer Choice, Substituted Compliance

Abstract:
International securities regulation has arrived at the forefront of the country's debate on financial market reform. The global economic crisis has exposed the enormous systemic risk that can arise where securities are sold across borders. Meanwhile, the Bernie Madoff and Allen Stanford frauds have illustrated the international reach of swindlers and conmen. Consequently, policymakers have vociferously called for not only domestic securities law reform, but also a more effective international regulatory architecture.

Yet international securities regulation is poorly understood. Securities scholars traditionally view the SEC as a global regulatory monopolist due to the size of US stock exchanges. But they overlook the rise of foreign capital markets and the diminished influence of the SEC. Meanwhile, international law scholars view international securities regulation as involving what game theoreticians would call an "assurance" game where information sharing through informal networks of regulators facilitates swift agreement on standards. But they ignore the asymmetric costs of adopting international standards and thus underestimate the obstacles to convergence.

This Article overcomes these limitations and offers a fuller theoretical account of international securities regulation. It argues that due to increased global competition for securities transactions, coordination among securities regulators often comprises a "battle of the sexes" game where regulators are not necessarily incentivized to adopt the other's regime. Instead, only where securities regulation touches upon what can be considered "systemic risks" - defined as financial risks whose costs are internalized broadly and deeply across borders - will networks be potentially capable of realizing significant regulatory coordination. And even here, coordination is most likely to be undertaken by cross-functional networks operating with the credibility and support of political elites. The Article then shows how the SEC, cognizant of this development, is forming club-like alliances that offer foreign regulators special rewards, like eased market access for foreign market participants, for adopting some of its policy preferences. The Article then assesses the effectiveness of this approach and concludes that clubs have better prospects of success in enforcement cooperation than in substantive areas of securities law.

SEC, international financial regulation, IOSCO, G-20, Financial Stability Board, networks, regulatory competition

Abstract:
This article provides an in-depth analysis of the at times problematic interplay of regional and bilateral treaties regulating international economic law. Though academics have long debated whether regional and bilateral instruments threaten the hegemony of the multilateral trading system, no attention has been paid to equally far-reaching tensions arising between regional and bilateral agreements themselves. Scholars have instead almost universally treated bilateral and regional commercial agreements as functionally indistinguishable. This article draws on recent empirical evidence to show that bilateral commercial comprise a distinct and important mode of cooperation at times inconsistent with the aims of some regional organizations and frameworks. It also examines the likely outcomes for such conflicts of law, and incorporates the findings in a critical reassessment of the possible costs and benefits of multi-level economic integration.

International Economic Law, Bilateral Investment Treaties, Regionalism, World Trade Organization, European Union, Mercosur, Andean Community, International Politics, Multilateralism, Bilateralism, Free Trade, Globalization

Abstract:
At the heart of the extensive literature on corporate law federalism is the belief that federalism engenders regulatory competition and federalization eliminates it. Federalism, a mode of governance where states act as providers of corporate law, is said to drive states to compete for charters. By contrast, federalization, which occurs when the federal government promulgates law, preempts state-level competition. Consequently, scholars who believe that regulatory competition promotes the provision of "good" laws have long railed against federal securities statutes like Sarbanes-Oxley that nationalize elements of traditional (state) corporate law. Meanwhile, other scholars have lauded preemptive securities regulation arguing that federal intervention prevents the dismantling of regulatory standards and a race to the bottom.

This Article argues that both sides of the debate mistake the impact of federalization on the market for corporate law. Drawing on recent legal and empirical scholarship, this Article shows that as a descriptive matter the domestic market for corporate law is in some regards animated less by competition than what is an increasingly international market for securities law. States do not generally compete vigorously to attract charters due to Delaware's longstanding domination of the market and other supply-side disincentives. On the other hand, national securities regulators face intense pressure to provide cost-effective rules to draw foreign issuers to their home markets. These observations suggest that where federal regulators preempt, they are engaged in what can be considered a "doubled race." First, they must monitor for market failure and ensure that Delaware, the dominant supplier of corporate charters, provides sound corporate law. And second, they must themselves cope with the onslaught of competition from other national regulators seeking to attract securities transactions. As a result, preemption is a weaker counterweight to any competition arising among states than many scholars have anticipated.

federalism, federalization, corporate law, securities law, regulatory competition

Abstract:
Despite their popularity, regional organizations are decidedly controversial. As integrative agreements only between neighboring countries, regional organizations do not always create new trading opportunities. Instead, by lowering tariffs on goods flowing between member states, while at the same time retaining high tariffs against goods from third-party countries, they potentially substitute intra-bloc imports for what would otherwise be imports from outside the group. Because of such trade diversion, many commentators have characterized regional free trade as a "club good" - that is, as a special private benefit deriving value, in part, from the fact that nonparticipants are excluded.

This Article undertakes the first systematic examination of regional organizations as clubs in the legal literature and argues that although regional organizations exhibit some club-like dynamics they are at best incomplete forms of such cooperation. Two shortcomings are specifically identified. First, the Article shows that the legal architecture of trade agreements limits the degree to which many regional organizations are truly exclusive. As a result, regional organizations provide fewer benefits to members than classic economic clubs. Second, regional organizations are heterogeneous in ways other than those envisioned in the classic economic club literature. Specifically, members differ not in terms of the degree to which they prefer the club good - as is the theoretical conception of heterogeneity in the club goods literature - but instead in terms of their qualitative characteristics and competitiveness. Each member will thus not only incur different costs in joining a regional organization, but will also have a different point at which the preferential trading market will be congested with too many competitors. This heterogeneity further suggests that, all other political factors being equal, expansion of a regional organization's membership will be based not so much on the economic competitiveness of new members, but instead on the inefficiency of a prospective member state's domestic industries relative to those of each of the regional organization's members.