cussed above. This report not only identified the problems encountered by multina-
tional offerings but also made recommendations to facilitate such offerings. The
IOSCO committee, echoing the conclusions reached by the Commission in its Concept
Release on Multinational Offerings (discussed above), stated that efficiency of the cap-
ital-raising process would be greatly enhanced by permitting an issuer to prepare one
disclosure document for use in each jurisdiction in which it sells securities and rec-
ommended that securities regulators facilitate the use of single disclosure documents,
whether by harmonization of standards, reciprocity, or otherwise. The committee also
recommended that timeliness and period of financial reporting should either be har-
monized or accommodations made to foreign issuers. Since in many jurisdictions the
making of a public offering leads to the imposition of continuous disclosure require-
ments, the committee also recommended further study to develop internationally ac-
ceptable continuous disclosure documents. Additionally, the committee recommended
further study with respect to harmonization of rules relating to stabilization and other
controls over dealings, and codification of accommodations already made in this area.
The SEC’s participation in this report does not necessarily imply agreement with
all its conclusions, but it gives some indication of the direction in which IOSCO, an
organization heavily influenced by the SEC as its largest and most experienced mem-
ber, is moving as a whole. The SEC has generally complied with IOSCO recommen-
dations, as it did in the 1994 rule changes discussed above—the acceptance of IAS
cashflow statements was an IOSCO recommendation,—and as it did in the adaption
of the IOSCO International Disclosure Standards discussed in the next section.
(ii) IOSCO International Disclosure Standards. In 1999, the SEC adopted a series of
amendments to the nonfinancial disclosure requirements of registration statements
and annual reports filed by foreign private issuers. These changes of affected non-
U.S. companies that register their securities with the Commission in connection with
a public offering in the United States or a listing on a U.S. national securities ex-
change and make annual reports under the Exchange Act thereafter. The Commission
made these changes by modifying Form 20-F, which is the form used for registration
and annual reports under the Exchange Act, and the contents of which are incorpo-
rated by reference into the forms used by non-U.S. issuers to register offerings under
the Securities Act.
The amendments represent an effort by the SEC to conform U.S. disclosure re-
quirements for foreign private (i.e., nongovernmental) issuers to a core set of inter-
national disclosure standards endorsed by IOSCO. The IOSCO international disclo-
sure standards were developed to reflect current international disclosure practices and
are intended to facilitate the ability of companies to conduct cross-border offerings
of equity securities (The SEC actually went further than mandated in the standards
since it applies them to periodic reports too.) IOSCO intended its members imple-
ment as much as possible of the core disclosure standards in their jurisdictions with
the hope that broad acceptance of the disclosure standards will allow issuers to pre-
pare one disclosure document that, with a minimum amount of tailoring, may be ac-
cepted in multiple jurisdictions.
The SEC modified Form 20-F to replace most of the nonfinancial statement dis-
closure requirements with the international disclosure standards adopted by IOSCO;
revised the registration forms under the Securities Act applicable to foreign private
issuers to cross-reference revised Form 20-F whenever necessary; and incorporated
into Form 20-F the provisions of the international disclosure standards addressing the
14.5 RESPONSE TO GLOBALIZATION 14 • 17