Courses

    In recent years, the world’s capital markets have continued to undergo dynamic and fundamental change, both in terms of structure and complexity. Advancements in information and telecommunication technologies have virtually eliminated the boundaries between the capital markets of different nations. The regulatory structure underlying the U.S. financial system, much of which was created as a response to the 1929 stock market crash and the Great Depression, was designed with a national market in mind. The same is true for the regulatory systems that prevail in other jurisdictions. Although securities transactions can now be conducted half a world away with a simple click of a mouse, financial institutions and investors must contend with multiple, sometimes conflicting, laws and regulations each time they cross a national border. This increases cost and complexity.

Today, the global nature of modern capital markets frequently means that new regulation imposed in one jurisdiction may have legal and market effects in another. Along with this globalization has come the internationalization of securities market fraud. Cross-border fraud poses significant difficulties and new challenges to securities regulators whose sovereignty and powers stop at their own national border although their jurisdiction may stretch beyond. Because markets are now global but regulation remains local, cross-border cooperation between financial regulators for purposes of regulation and enforcement has become a necessity and is now the norm. Financial regulators, policy makers, financial institutions, and investors have all had to adjust to this new global environment.

This course is intended to provide students with an understanding of how the global capital market is evolving, the manner in which national securities markets interact, the collaborative process by which markets are regulated in practice, and the regulatory challenges that characterize the global market’s evolution. The course will discuss the effects that de facto international standards have on domestic markets, laws and regulations, both in the U.S. and abroad. Emphasis will be placed on the international aspects of securities regulation in the U.S., including the extraterritorial effects U.S. financial laws have on firms in other countries, and the effects foreign laws have on firms operating in the U.S. However, the course will also offer a comparative review of the other regulatory regimes, including the EU, Japan and China, and how these markets are impacting international capital market regulation. Finally, the course will discuss the nascent legal, constitutional and policy challenges that the international regulation of capital markets present.