jurisdiction, which is in many cases extraterritorial in scope. The SEC has pointed out
that, in tender offers for securities regulated by the Williams Act, use of the jurisdic-
tional means to sell into the market by the security holders themselves, even where
the offeror has avoided such jurisdictional means, will result in the SEC’s having au-
thority over the offer. However, having asserted jurisdiction, the SEC has attempted
to accommodate foreign tender offers where necessary and consistent with the pro-
tection of U.S. investors.
In 1999, the Commission adopted new rules to make it easier for non-U.S. com-
panies to make rights offerings into the United States and for any person (U.S. or
non-U.S.) to extend into the United States tender offers and exchange offers for se-
curities of non-U.S. companies that are made primarily outside the United States.
The tender offer rules exempt tender offers for the securities of non-U.S. issuers
from most provisions of the Williams Act when U.S. holders own 10% or less of the
subject class of the securities. The rules provide more limited exemptions from some
of those provisions when U.S. holders own more than 10% but no more than 40% of
the subject class of securities.
The rules also exempt from registration under the Securities Act exchange offers
for the securities of non-U.S. issuers and rights offers by non-U.S. issuers where 10%
or less of the subject class of securities is owned by U.S. holders. In both these cases,
public offers of securities may now be made into the United States on the basis of the
information documents (if any) distributed overseas. These must be in English, and
distributed to U.S. holders on the same basis as they are distributed in the issuer’s
home jurisdiction.
In contrast to the MJDS, no reconciliation of financial statements is required, and
the rules are entirely neutral as to the jurisdiction under whose rules disclosure, if in-
deed there is any, is required. The offering documents are furnished to (not officially
“filed with”) the SEC, and they must bear a legend regarding the non-U.S. nature of
the transaction and the difficulty of enforcing rights against foreign companies. The
anti-fraud rules still apply, and the offeror (if not a U.S. person) is required to file a
consent to service of process in the United States. On the whole, however, this is a
fairly revolutionary ceding of regulation on the part of the SEC.
(iv) Regulation M. In the adoption of Regulation M in 1997, the SEC codified much
of the relief it had granted over the years with respect to its antimanipulation rules
where U.S. and overseas regulations conflicted. In particular, it granted blanket relief
for transactions governed by the United Kingdom’s City Code on Takeovers, on the
grounds that U.K. rules provided adequate investor protection.
(d) IOSCO, IASC and Harmonization
(i) IOSCO. The SEC’s participation in the International Organization of Securities
Commission, (IOSCO), whose membership includes securities administrators from
nearly 50 countries, demonstrates the SEC’s commitment to the development of in-
ternational standards. In its 1988 Policy Statement, the SEC stated that securities reg-
ulators should utilize bilateral and multilateral relationships in the securities areas
and that cooperative efforts through multilateral organizations such as IOSCO should
be continued and strengthened.
The Commission has played a major part in IOSCO committees and task forces.
One important result of this is the IOSCO report on international equity offerings dis-
14 • 16 GLOBALIZATION OF WORLD FINANCIAL MARKETS