The Imperial SEC? - Foreign Policy and the Internationalization of the Securities Markets, 1934-1990

Internationalization of the Securities Markets

The SEC Grapples with Internationalization

Throughout the 1970s, what came to be known as the "internationalization of the securities markets" was clearly on the SEC's agenda, driven by removal of the IET and larger economic trends. In 1973, the SEC created an Office of International Corporate Finance, "in recognition of the increased internationalization of capital markets and the securities business."(72) The office was responsible for offerings by U.S. companies abroad, offerings by foreign issuers in the United States, the drafting of special disclosure forms for foreign issuers, and the creation of rules and regulations regarding foreign issuers and other market professionals.

During the SEC's 1977 Major Issues Conference, one session focused on the question: "What Can and Should the Commission Do to Maintain Investor Protection and Still Encourage the Internationalization of the Securities Markets."(73) Some of the major international issues presented included the scope of disclosures required of foreign issuers, whether the SEC should support or discourage foreign issuers from accessing U.S. capital markets, and whether foreign brokers should be regulated by the SEC.

As the conference discussion paper stated, the SEC had always taken the position that there should not be "a double standard of disclosure" for foreign issuers.(74) Yet it also recognized that U.S. accounting standards represented the greatest obstacle to foreign issuers accessing U.S. capital markets. In contrast to statements that some Commissioners and staff were making, the paper noted that, except for certain accommodations that had already been made, the SEC did not intend to make further concessions.

Different Commissioners and staff members seemed to be conflicted about what the SEC's position regarding internationalization should be. Some believed that the SEC needed to be more flexible in order to encourage internationalization. Others took the position that foreign and domestic issuers should be treated exactly the same.

<<Previous Next >>

Related Museum Resources

Papers

December 14, 1964

Memo from Jeffrey D. Bauman on legislative history of the problem of requiring issuers of foreign securities traded over-the-counter to comply with disclosure requirements of the Securities Exchange Act of 1934

image pdf (Courtesy of the National Archives and Records Administration)

March 24, 1965

Memo by Maxwell Kaufman on trends in financial disclosures of foreign companies

image pdf (Courtesy of the National Archives and Records Administration)

March 26, 1965

Memo from Edmund P. Shevlin to Abraham Zwerling on legislative and administrative history of the status of foreign securities under the reporting, registration, proxy and insider trading provisions of the Securities Exchange Act

image pdf (Courtesy of the National Archives and Records Administration)

June 30, 1973

39th Annual Report of the Securities and Exchange Commission

image pdf (Government Records)

February 7, 1974

"Foreign Investment in U.S. and U.S. Securities Laws," Speech by SEC Chairman Ray Garrett, Jr. to the Chamber of Commerce

transcript pdf (Courtesy of Harvey L. Pitt)

April 2, 1974

"Disclosure by Foreign Companies in U.S. Markets," Speech by SEC Chairman Ray Garrett, Jr. to the Conference on the Re-opening of U.S. Capital Markets

transcript pdf (Courtesy of Harvey L. Pitt)

March 25, 1976

"SEC - Catalyst for Competitive Free Enterprise," Address by SEC Commissioner John R. Evans to Brookings Institution Seminar on International Trade and Finance

image pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)