14 • 1

CHAPTER

14

GLOBALIZATION OF WORLD

FINANCIAL MARKETS: PERSPECTIVE

OF THE U.S. SECURITIES AND

EXCHANGE COMMISSION

Sara Hanks

Clifford Chance

CONTENTS

14.1 Introduction 1
14.2 Function and Organization 2
(a) Division of Corporation
Finance 3
(b) Office of the Chief
Accountant 3
14.3 Relationship with U.S.
Accounting Bodies 4
14.4 Challenges Posed to the SEC by
International Developments 6
(a) Development of Competing
Capital Markets 7
(b) Cross-Border and
Multijurisdictional Offerings 8
(c) Tarnish on the “Gold
Standard” 9
14.5 Response to Globalization 9
(a) Policy Statements 9
(b) Adaptation of Rules
Regarding Non-U.S. Issuers 11
(i) Changes to Rules
Relating to Public
Offerings 11
(ii) Non-Public Offerings
under Rule 144A. 11

(c) Multijurisdictional Disclosure

System and other Reciprocal

Initiatives 13

(i) Concept Release 13

(ii) U.S.–Canadian Multi-

jurisdictional Disclosure

System 13

(iii) Cross-Border Tender

and Exchange Offers 15

(iv) Regulation M 16

(d) IOSCO, IASC, and

Harmonization 16

(i) IOSCO 16

(ii) IOSCO International

Disclosure Standards 17

(iii) International Accounting

Standard Committee 18

(iv) Concept Release on

International Accounting

Standards 20

(e) Other SEC Initiatives 22

14.6 The Future 23

SOURCES AND SUGGESTED

REFERENCES 23

14.1 INTRODUCTION. Why should a handbook on international finance and ac-
counting include an in-depth discussion of only one regulatory agency? The easy an-
swer is that the U.S. Securities and Exchange Commission (SEC or the Commission)
is the largest regulator of securities markets in the world and that it oversees the ac-
counting disclosure of corporations in the world’s largest and most liquid single cap-