International corporate regulation: Listing rules and overseas companies

International and Comparative Law Quarterly

Volumn 50, Issue 4, 2001, Pages 787-810

  Macneil, Iain ^a   Lau, Alex ^a  

^a UNIVERSITY OF ABERDEEN   (United Kingdom)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 85013448148     PISSN: 00205893     EISSN: 14716895     Source Type: Journal    
DOI: 10.1093/iclq/50.4.787     Document Type: Article

References (44)

1. See J. Kehoe and J. A. Bannister, ‘International Listings, Access to New Markets’, PLC May 1996 23–31
2. L. Fergusson and C. Rogers ‘Secondary Listings on the London Stock Exchange’, European Counsel Dec 1997/Jan 1998 27–36.
3. See A.N. Licht, ‘Genie in a Bottle? Assessing Managerial Opportunism in International Securities Transactions’ 51(1) Columbia Business Law Review (2000) 51.
4. See Chan, MacNeil, and Lau, ‘Lawyers Perceptions of Overseas Incorporated Companies Listed in Hong Kong’ 290 Managerial Auditing Journal 2001) 165.
5. See H. Kent Baker, ‘Why US companies list on the London, Frankfurt and Tokyo Stock Exchanges’, 6 Journal of International Securities Markets (1992) 219.
6. Hong Kong Economic Journal, 16 May 1996, p 14.
7. Hong Kong Economic Journal.
8. See E. Fung, ‘Legal Implications of foreign listings for PRC enterprises with particular reference to HK’ 17(2) Co Law (1996) 35.
9. The mismatch will occur irrespective of whether jurisdiction in company law is defined by reference to incorporation or location of the ‘siège réel’. See generally A. Licht, ‘Regulatory Arbitrage for Real: Securities Regulation in a World of Interacting Securities Markets’, 38 Virgina Journal of International Law 563.
10. A solution favoured by the US Securities and Exchange Commission. See Policy Statement of the SEC on the Regulation of International Securities Markets, SEC Exchange Act Release No 6807, 53 Fed. Reg. 46,963 (1988).
11. See, eg H. Hansmann and R. Kraakman, ‘The End of History for Corporate Law’, Yale International Center for Finance Working Paper No 00–09
12. R. J. Gilson, ‘Globalising Corporate Governance: Convergence of Form or Function’, Columbia Law School Centre for Law and Economic Studies Working Paper No 174 .
13. See R. Romano, ‘Empowering Investors: A Market Approach to Securities Regulation, 107 Yale L.J. (1998) 2359
14. J. P. Trachtman, ‘Regulatory Competition and Regulatory Jurisdiction’ (2000) Journal of International Economic Law 331.
15. The metaphor was coined by Justice Brandeis in Liggett v Lee 288 US 517, 557–60 (1933). See D. Charny (below n. 23).
16. But see D. Charny, ‘Competition among Jurisdictions in Formulating Corporate Law Rules: An American Perspective on the “Race to the Bottom” in the European Communities’, 32(2) Harvard International Law Journal (1991) 423.
17. The decision of the European Court of Justice in Case C-212/97 Centros Ltd. v Erhvervsog Selskabsstyrelsen [1999] 1 ECR 1459 has prompted considerable interest in the differing requirements for incorporation demanded by EU Member States
18. see E. Micheler, ‘The impact of the Centros case on Europe's company laws’, 21(6) Company Lawyer (2000) 179.
19. See P. Mahoney, ‘The Exchange as Regulator’, 83 Virginia Law Review (1997) 1453.
20. See C. Sherman Cheung and J. Lee, ‘Disclosure environment and listing on foreign stock exchanges’, 19 Journal of Banking and Finance (1995) 347–362
21. A. Licht, ‘Regulatory Arbitrage etc (above n. 17).
22. See O Fuerst, ‘A theoretical analysis of the investor protection regulations argument for global listing of stocks’, International Centre for Finance at Yale (available at ). This argument should not be confused with the disclosure of ‘inside’ information, which is a criminal offence. Fuerst refers to indirect communication of management's expectations rather than the specific communication of price-sensitive information. His argument is that an overseas listing on a foreign market with higher regulatory standards (especially as regards disclosure of information to investors) will be attractive to companies with the potential for above-average profits growth and vice versa. It is the exposure to the higher regulatory standard rather than the information disclosed at any particular point in time which is significant as the higher regulatory standard enhances the credibility of all information from the perspective of investors.
23. See Alexander, Eun, and Janakiramanan, ‘International Listings and Stock Returns: Some Empirical Evidence’ (1988) 23 Journal of Financial and Quantitative Analysis 135
24. S. Lau et al, ‘Valuation effects of international stock exchange listings’ 18 Journal of Banking and Finance (1994) 743
25. D. Miller, ‘The market reaction to international cross-listings: evidence from depository receipts’, 59 Journal of Financial Economics (1999) 103.
26. See G. Ferrarini, ‘Towards a European Law of Investment Services and Institutions’ (1994) 31 CML Rev 1283
27. ‘The European Regulation of Stock Exchanges: New Perspectives’ (1999) 36 CML Rev 569.
28. Council Directive 79/279 [1979] OJ L66/21.
29. Council Directive 80/390 [1980] OJ L100/1 as amended by Directive 87/345 relating to mutual recognition of listing particulars and Directive 94/18 relating to exemption from the obligation to publish listing particulars.
30. Council Directive 82/121 [1982] OJ L48/26.
31. Council Directive 89/298 [1989] OJ L124/8.
32. See sections 144(2) and 144(2A) of the Financial Services Act 1986.
33. The position is changed under the Financial Services and Markets Act 2000 (FSMA 2000) which will eventually replace the provisions of the FSA 1986 in respect of listing: s. 76 FSMA 2000 provides for a right of appeal to the Financial Services and Markets Tribunal created by the Act.
34. On the basis of the principle established in R v Panel on Takeovers and Mergers, ex p Datafin plc and another [1987] 1 All ER 564.
35. Financial Services Act 1986 s. 152. See also s. 90 and schedule 10 FSMA 2000.
36. The rights referred to here are those in s. 89–96 of the Companies Act 1985. See I. MacNeil ‘Shareholders’ Pre-Emption Rights', Journal of Business Law (2001 forthcoming)
37. Directive 77/91 [1977] OJ L26/1.
38. See La Porta et al, ‘Legal Determinants of External Finance’, 52 Journal of Finance 1131 (1997)
39. ‘Law and Finance’, 106 Journal of Political Economy 1113 (1998)
40. B. Black, ‘The Legal and Institutional Preconditions for Strong Securities Markets’, Stanford Law School John M. Olin Program in Law and Economics Working Paper No. 179 (see ).
41. For explanations as to why jurisdictions differ and may not converge towards the most efficient approach see eg L. Bebchuck and M. Roe, ‘A Theory of Path Dependence in Corporate Governance and Ownership’, Columbia Law School Center for Law and Economic Studies, Working Paper No 131 (see ).
42. Report of the Committee on the Financial aspects of Corporate Governance (London: Gee, 1992).
43. Committee on Corporate Governance, Final Report (London: Gee, 1998).
44. See A Dignam, ‘A principles approach to self-regulation? The Report of the Hampel Committee on Corporate Governance’ (1998) 19 Co Law 141.