This book is the product of a Colloquium held by the Norton Rose M5 Group of independent legal practices and the Oxford University Law Faculty at St John's College, Oxford, on 14 and 15 September 1995. Its theme -- The Future for the Global Securities Markets -- is very important and topical. Securities markets worldwide are going through a period of unprecedented change and growth. Crossborder securities transactions both in the primary and secondary markets as well as the range of financial products have increased dramatically in the last decade. The change and growth has created more choice and risk for investors, increased the breadth and depth of securities markets and given issuers unparalleled access to a global investor base. It has also enabled practices developed in one jurisdiction to be adapted and exported elsewhere. It is now possible to talk about 'global' offering of securities. Several factors have driven and shaped these developments, including: the deregulation of many national economies in terms of abolition of exchange controls and liberalisation of capital flows; advances in information technology; the rise of institutional investors particularly pension funds; privatisations; the increasing internationalisation of investments; and the increasing competition for business and influence between different securities markets. These factors have brought about increasing integration and convergence of securities markets in different parts of the world. However, the integration and convergence of different securities markets has not yet resulted in the emergence of a truly single 'global' securities market.
This is largely because in virtually every jurisdiction (with the possible exception of Member States of the European Union), the regulation of public distribution of securities as well as the financial intermediaries through whom second-hand securities are bought and sold on organised markets is territorial, and shows insignificant deference to the laws and practices of other jurisdictions. Reciprocity is not a strong feature of securities regulation worldwide with the result that securities regulation is fragmented. This, by itself, is unremarkable: legislation and its enforcement are inherently territorial. Most securities laws impose penal consequences for violations and, with insignificant exceptions, no country enforces the penal laws of another. The problem is how to adapt national securities regulation to the increasingly crossborder nature of securities transactions. The challenges which the existing fragmentation of the regulation of the emerging 'global' securities market pose for cross-border securities transactions include the following: first, how issuers in one jurisdiction can access the securities market in another; second, how licensed financial intermediaries in one jurisdiction can carry on business and effect customer orders in another without becoming subject to the licensing and other laws of the other jurisdiction; and, finally, how territorial enforcement of securities legislation can contain transnational securities transactions. There is, in addition, legal uncertainty arising from the identification of the applicable law. Even where there are choices of law agreements, these frequently have to yield to mandatory rules of different countries, even though the objective of securities regulation in all jurisdictions is investor protection primarily through mandatory disclosure requirements.