Internationalization
The international dimension of exchange law, such as its extraterritorial
2004 de Règlement Général de l’Autorité des Marchés Financiers [Law of Oct. 29, 2004]
J.O. n. 253, Oct. 29, 2004, p. 18 262, at art. 512-3–512-6(Fr.); for detailed guidance, see
FSA Handbook, REC 2.5.10–16 (2011) (U.K.).
193 See supra Part I.B.2.
194 For a detailed account, see Andreas M. Fleckner, Verfassung der New York Stock Exchange, in,
INTERESSENKONFLIKTE BEIM BÖRSENGANG VON BÖRSEN, supra note 187, at 51-56.
195 See RUBEN LEE, RUNNING THE WORLD’S MARKETS: THE GOVERNANCE OF FINANCIAL
INFRASTRUCTURE (2011); see also FINANCIAL REGULATION AND SUPERVISION: A POSTCRISIS ANALYSIS (Eddy Wymeersch, Klaus J. Hopt & Guido Ferrarini eds., 2012).
552 Virginia Law & Business Review 7:513 (2013)
reach, is a phenomenon rather new to many jurisdictions.
196 When new technologies allowed exchange operators from Germany and elsewhere to solicit
new exchange members from all over the world, the United States prevented
them from entering the American market by banning foreign trading screens
from US soil.197 Only then—and probably motivated by anger at the United
States—did the German legislature regulate the access of foreign trading systems to Germany.
198 It seems from these and from other countries that the
whole debate on market access for foreign exchanges is influenced less by
regulatory rather than by political reasons, especially as no cases have come to
the fore where investor protection was at risk only because investors traded
through foreign exchanges. Allowing alternative trading systems to enter foreign markets, though, may require more regulatory caution. The right strategy
seems to differentiate between exchange operators and their supervisor, respectively.19
9 The topic should remain on the political agenda in the broader
context of the requirements that the United States imposes on foreigners that
want to access U.S. capital markets, such as traders, issuers, and exchanges.
Early fruits of the ongoing debate are reforms that eased the burdens on foreign issuers that would like to withdraw from the U.S. capital market
(2007),
200 that prepare their financial statements according to international
196 For the Germany, UK, and US jurisdictions, see GUNNAR SCHUSTER, DIE INTERNATIONALE ANWENDUNG DES BÖRSENRECHTS: VÖLKERRECHTLICHER RAHMEN UND KOLLISIONSRECHTLICHE PRAXIS IN DEUTSCHLAND, ENGLAND UND DEN USA (1996) (Ger.).
197 Howell Jackson, Mark Gurevich & Andreas M. Fleckner, Foreign trading screens in the United
States, 1 CAP. MARKT. L.J. 54-76 (2006).
198 Through the Gesetz zur weiteren Fortentwicklung des Finanzplatzes Deutschland
(Viertes Finanzmarktförderungsgesetz) [G], June 21, 2002, BGBL. I at art. 2, N. 24, 28
(Ger.) (adding §§ 37i-37m, 44 to the Securities Trading Act).
199 See, most notably, the Mutual Recognition Arrangement between the United States Securities and Exchange Commission and the Australian Securities and Investments Commission, together with the Australian Minister for Superannuation and Corporate Law, Aug.
25, 2008, SEC, available at
http://www.sec.gov/about/offices/oia/oia_mututal_recognition/australia/framework_a
rrangement.pdf. For an example of a previous “trial balloon,” see Ethiopis Tafara and
Robert J. Peterson, A Blueprint for Cross-Border Access to U.S. Investors: A New International
Framework, 48 HARV. INT’L L.J. 31-68 (2007); for a critical assessment, see Howell E. Jackson, A System of Selective Substitute Compliance, 48 HARV. INT’L L.J. 105-119 (2007). See also
Eric J. Pan, Challenge of International Cooperation and Institutional Design in Financial Supervision:
Beyond Transgovernmental Networks, 11 CHI. J. INT’L L. 243-284 (2010); Pierre-Hugues Verdier, Mutual Recognition in International Finance, 52 HARV. INT’L L.J. 55-108 (2011).
200 Termination of a Foreign Private Issuer’s Registration of a Class of Securities Under
Section 12(g) and Duty To File Reports Under Section 13(a) or 15(d) of the Securities Exchange Act of 1934, Exchange Act Release No. 34-55540, 72 Fed. Reg. ¶¶ 16934-60 (Mar.
27, 2007).
7:513 (2013) Stock Exchange Law 553
financial reporting standards (2007),
201 whose securities are not listed on a
national securities exchange or otherwise publicly traded (2008),
202 and that
are subject to the respective disclosure regime for foreign private issuers
(2008).
203
Another set of problems associated with the international reach of stock
exchange law is cross-border exchange mergers.204 The most prominent example is the combination of the New York Stock Exchange and Euronext
(2006), which, in turn, is the holding company of exchanges in Belgium,
France, the Netherlands, Portugal, and the United Kingdom. Policymakers
feel increasingly uncomfortable with the oversight over such entities. In addition, with more and more of the leading exchange operators merging, severe
antitrust issues are raised. While national regulators may prefer to extend the
extraterritorial reach of the laws they are operating under, the better regulatory approach will be to intensify the cooperation with foreign regulators. The
failed merger of NYSE Euronext with Deutsche Börse (2011/2012) has once
again highlighted the main problems. 205 The fierce competition, especially
with alternative trading systems,
206 will continue to put pressure on the traditional exchange operators to team up with their counterparts in order to low-
201 Acceptance From Foreign Private Issuers of Financial Statements Prepared in Accordance
With International Financial Reporting Standards Without Reconciliation to U.S. GAAP,
Exchange Act Release Nos. 33-8879 and 34-57026, 73 Fed. Reg. ¶¶ 986-1012 (Dec. 21,
2008).
202 Exemption From Registration Under Section 12(G) of the Securities Exchange Act of
1934 for Foreign Private Issuers, Exchange Act Release No. 34-58465, 73 Fed. Reg. ¶¶
52752-69 (Sept. 5, 2008).
203 Foreign Issuer Reporting Enhancements, Release Nos. 33-8959 and 34-58620, 73 Fed.
Reg. ¶¶ 58300-27 (Sept. 23, 2008).
204 See, e.g., Klaus J. Hopt, Amerikanisches Recht durch die Hintertür, FRANKFURTER ALLGEMEINE
ZEITUNG, Nov.10, 2006, at 24 (Ger.); FABIAN L. CHRISTOPH, BÖRSENKOOPERATIONEN
UND BÖRSENFUSIONEN (2007) (Ger.); Pierre Schammo, Regulating Transatlantic Stock Exchanges, 57 INT’L & COMP. L.Q. 827-862 (2008); DENNIS A. LEPCZYK, RECHTLICHE
ASPEKTE INTERNATIONALER BÖRSENFUSIONEN: GESELLSCHAFTSRECHT, ORGANISATIONSRECHT, AUFSICHTSRECHT (2009) (Ger.); BERNADETTE SEEHAFER, GRENZÜBERSCHREITENDE BÖRSENKONZENTRATIONEN IM DEUTSCHEN UND BRITISCHEN RECHT
(2009) (Ger.); LEE, supra note 195.
205 See, most importantly, Press Release, European Commission, Mergers: Commission
Blocks Proposed Merger Between Deutsche Börse and NYSE Euronext (Feb. 1, 2012)
(on file with the Virginia Law and Business Review); for a critical assessment under German exchange law (based on an expert opinion commissioned by one the constituencies),
see Ulrich Burgard, Die börsenrechtliche Zulässigkeit des Zusammenschlusses der Deutsche Börse AG
mit der NYSE Euronext im Blick auf die Frankfurter Wertpapierbörse, 65 ZEITSCHRIFT FÜR
WIRTSCHAFTS- UND BANKRECHT 1973-82, 2021-34 (2011) (Ger.).
206 See infra Part III.C.
554 Virginia Law & Business Review 7:513 (2013)
er their costs. This means that cross-border exchange mergers will probably
remain on the agenda not only of the exchange operators but also of legislators, regulators, and other observers.