CALIN ROVINESCU AND GILLES THIEFFRY1
The recent globalisation of the securities markets has enabled issuers to raise capital outside their own countries. According to the International Financing Review, in 1985, US$4.3 billion in international equity issues were completed worldwide. This market grew to US$20.9 billion in 1987 and US$22.5 billion in 1992. By 1994, the total value of all issues into the US market alone came to US$55.97 billion. Such international capital raising exercises require coordination on the part of the different financial intermediaries involved in the placement of securities as well as compliance with the various marketing requirements in the different jurisdictions where such securities are placed, in view of the potential liabilities arising out of such placements.
Irrespective of the different regulations applying to the offering, the coordination of the placement of the securities will typically be undertaken by a financial institution acting as global coordinator. The cross-border marketing effort will be controlled by marketing arrangements. Such arrangements may either be informal or formal in the form of an orderly marketing agreement. Broadly speaking, such arrangements will establish the respective roles of the different members of the syndicates (or of the different regional syndicates) and can sometimes be fairly detailed and include the specific names of certain institutional investors to be approached by the respective managers; this is relevant when deciding whether a specific investor falls into one geographic syndicate or another (e.g. the relevant test may be the place of incorporation of the investor in any specific region or alternatively its actual place of business). In addition to specific contractual marketing restrictions, formal orderly marketing agreements sometimes specify the different selling restrictions imposed by local securities laws. These restrictions often apply to the information which can be distributed in the context of an offering.____________________