Getting U.S. Security Holders to the Party: The SEC's Cross-Border Release Five Years On

Abstract:     
On October 22, 1999, the SEC in the Cross-Border Adopting Release adopted new rules relating to cross-border tender and exchange offers, business combinations, and rights offerings. These rules were enacted as part of an ambitious program by the SEC staff to shepherd the U.S. federal securities laws into the international age by facilitating the inclusion in cross-border takeovers of previously excluded U.S. holders. Five years on, the full impact of the Cross-Border Rules on the international market remains uncertain and rules that were expressly intended to facilitate the inclusion of U.S. security holders in cross-border takeovers have, in many instances, encouraged exclusion. This Article attempts, on the basis of five years of practice and legal development, to pinpoint those areas where the Cross-Border Rules appear to be working; highlight where changes might be beneficial; and suggest possible improvements, reforms, and revisions that would better provide participants with the flexibility that the SEC originally intended.

Keywords: cross-border, takeovers, securities regulation, Williams Act, cross-border release

JEL Classifications: K22, G15, G18, G34

Accepted Paper Series