Money makes the world go round. If not a truism, at least it holds for financial markets. The amount of capital traded thereupon outreaches human imagination by far. At the same time, financial markets create specific dangers for their participants. These dangers are essentially predicated upon information asymmetries between companies as capital seekers and investors as capital providers. The traditional approach to eliminate these information asymmetries is by regulation rather than leaving the solution to the market mechanism . Thus, financial markets are regulated markets.
The means of such regulation are usually twofold. First, capital seekers are imposed upon a duty to disclose material information. Secondly, if they do not sufficiently comply with this duty, sanctions are imposed. This, of course, poses the question of who can enforce these legal rules. The answer is twofold. Some rules create private causes of action enabling the impaired party to seek relief with the courts. Others provide for enforcement by an administrative agency.
This, however, raises the question which agency is called to perform this task. Traditionally, the answer has been easy as financial markets used to be national markets. Consequently, pursuant to traditional concepts of sovereignty in international law, each country could and would determine the competent agency. Regulation was and still mainly is national. Meanwhile, globalization and the revolution in telecommunication technology have blurred the borderlines between originally separated financial markets. Financial markets are now becoming international markets.
This reveals an incongruity. Although financial markets are international markets, they are nationally regulated. One might suggest implementing an international regulation to avoid this discrepancy and, indeed, such aspirations can be found to a certain extent. However, on a global stage a uniform regulatory system seems highly unrealistic. Thus, it still falls to national regulators to meet the challenges by the internationalization of financial markets. This paper intends to explore how the United States and Germany grapple with this issue by analyzing the ambit of international enforcement jurisdiction in securities law.
Inhaltsverzeichnis (Table of Contents)
- A. Basics
- I. Occasion for Subject Matter
- II. Delimitation of Subject Matter
- III. Impact of International Law on Subject Matter
- IV. Applicable Law and Subject Matter
- V. The Presumption against Extraterritoriality v. Rule-by-rule Approach
- B. Antifraud Liability
- I. Extraterritorial Application of Rule 10b-5
- 1. Text of Rule 10b-5 and its Interpretation in Morrison v. National Australia Bank Ltd.
- 2. The Effect of Dodd-Frank
- 3. Conduct and Effect Test
- II. Extraterritorial Application of §§ 14 and 20a WPHG
- 1. Insider trading
- 2. Market manipulation
- III. Conclusion
- C. Registration Requirement for Public Offerings
- I. Extraterritorial Application of § 5 Securities Act
- 1. Text of § 5 and its Interpretation by the SEC
- 2. Regulation S
- II. Extraterritorial Application of § 3 WpPG
- III. Conclusion
- D. Obligations of Periodic Disclosure
- I. Extraterritorial Application of § 13 (a) Exchange Act
- II. Extraterritorial Application of §§ 37v, 37w and 15 WpHG
- III. Conclusion
- E. Conclusion and Critique
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This study aims to provide a comparative analysis of U.S. and German law regarding international enforcement jurisdiction in securities law, specifically focusing on the extraterritorial application of antifraud rules, registration requirements for public offerings, and obligations of periodic disclosure.
- Extraterritorial application of securities laws in the U.S. and Germany
- The presumption against extraterritoriality and the rule-by-rule approach
- Comparative analysis of key legislation and case law
- Impact of international law on securities regulation
- Challenges and considerations for cross-border enforcement
Zusammenfassung der Kapitel (Chapter Summaries)
The study begins by outlining the scope and objectives of the analysis, examining the interplay between international law and domestic securities regulations. It delves into the concept of extraterritoriality and explores the different approaches employed in the U.S. and Germany. Chapter B investigates the extraterritorial application of antifraud rules in both jurisdictions, focusing on the landmark case of Morrison v. National Australia Bank Ltd. and its impact on Rule 10b-5. Chapter C examines the registration requirements for public offerings, comparing the extraterritorial reach of § 5 of the Securities Act in the U.S. with the corresponding provisions in German law. Chapter D explores the obligations of periodic disclosure, analyzing the extraterritorial reach of § 13 (a) of the Exchange Act in the U.S. and its counterparts in German law.
Schlüsselwörter (Keywords)
The key terms and concepts covered in this study include extraterritorial jurisdiction, securities law, antifraud provisions, registration requirements, periodic disclosure, cross-border enforcement, international law, comparative law, U.S. securities laws, German securities laws, Morrison v. National Australia Bank Ltd., Dodd-Frank Act, Rule 10b-5, § 5 Securities Act, § 13 (a) Exchange Act, WPHG, Regulation S.
- Quote paper
- Michael Müller (Author), 2011, International Enforcement Jurisdiction in Securities Law, Munich, GRIN Verlag, https://www.grin.com/document/179721
