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Cross-Listings and the New World of International Capital: Another Look at the Efficiency and Extraterritoriality of Securities Law

91 Pages Posted: 10 Nov 2013 Last revised: 30 Jan 2017

Yuliya Guseva

Rutgers, The State University of New Jersey - Rutgers Law School

Date Written: November 16, 2012

Abstract

This Article examines the cumulative welfare effect of the application of the U.S. regulatory regime on foreign private issuers (FPI) and whether the extraterritorial reach of U.S. law creates unnecessary risks deterring crosslistings. To assess the deterrence effect and optimality of regulations, the research designs a simplified model explaining decision-making processes of control persons and applies the model to the FPI regulatory regime and case law analysis. The Article assembles a sample of seventy-five cases, interprets the application of the conduct and effects test and recent Supreme Court decisions, examines deregistration forms filed in 2001-2011, and juxtaposes statistical data with recent law reforms in the United States, the European Union, and a number of other jurisdictions. The research concludes that the U.S. policies are not uniformly value maximizing for all categories of FPI. The current singlemodal policies of indiscriminate incremental deregulation fail to properly address the concerns of issuers from developed economies and may be socially wasteful and unnecessary for FPI from emerging markets. To solve this dilemma, the Article suggests three solutions premised on the policy of regulatory granularity.

Keywords: securities, capital markets, international, extraterritorial, Morrison v. NAB, private right of action, Rule 10b-5

JEL Classification: K00, K22, K33, K42

Suggested Citation

Guseva, Yuliya, Cross-Listings and the New World of International Capital: Another Look at the Efficiency and Extraterritoriality of Securities Law (November 16, 2012). Georgetown Journal of International Law, Vol. 44, No. 2, 2013. Available at SSRN: https://ssrn.com/abstract=2352312 or http://dx.doi.org/10.2139/ssrn.2352312

Yuliya Guseva (Contact Author)

Rutgers, The State University of New Jersey - Rutgers Law School ( email )

NJ
United States

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