Should federal securities laws apply to overseas transactions involving shares that are cross-listed on US. exchanges? This Comment approaches that question from two directions: Supreme Court doctrine and modern finance theory. As a doctrinal matter, this Comment argues that under the Supreme Court's 2010 decision in Morrison v. National Australia Bank Ltd., the answer is yes: federal securities laws should apply to all transactions involving shares that are listed for trading on US. exchanges, including transactions that occur overseas. From a finance theory perspective, this Comment explains how allowing foreign firms to "opt in" to US. securities laws through cross-listing can create an environment in which issuers choose the legal regime that minimizes their capital-raising costs. The Morrison majority opinion, if faithfully followed, could mark a step toward a system of "issuer choice." Yet, federal district courts have strayed from the text of the Morrison majority's holding in ways that may reduce the efficiency of capital markets.
Issuer Choice After Morrison,
Yale J. on Reg.
Available at: http://digitalcommons.law.yale.edu/yjreg/vol28/iss2/6