Study On The Legal Coordination Approach To Regulating Foreign Securities Issuers

In recent years,the internationalization of China's securities market has been continuously promoted and a series of achievements have been made in its opening up to the outside world.In 2015,the introduction of foreign securities issuers into China's market was included in the draft Amendment to the Securities Law,marking the gradual and gradual pace of the issuance and listing of foreign securities issuers in China's securities market.In this process,construction of related legal systems must be addressed in order to guarantee the orderly operation of market and to safeguard the economic order and the interests of investors in our.This research is just carried out in this context.There are differences in the legal system of securities regulation between different countries.Such a difference will be magnified when the degree of internationalization of the securities market is getting higher and higher,and securities issuers begins to seek to issue and list overseas.Some of them even make public offering and list in more than one market at the same time.The most crucial issue to be solved in this study is that when building the International Board to introduce foreign securities issuers in such a general atmosphere,what kind of systems and approaches should be adopted to coordinate difference in legislation regulating securities issuers in every country.This is a precondition that needs to be resolved in building the legal system regulating foreign securities issuers.In order to study the approach of legal coordination in regulating foreign securities issuers,this paper analyzes three regulatory issues namely market access,corporate governance and information disclosure.It analyzes the application of national treatment approach,exemption approach,integration approach and equivalence approach in these three issues in the United States,The United Kingdom,the European Union and other countries and regions and its historical development.It discusses the reasons why different countries and regions adopt different approaches of legal coordination in various regulatory matters,and reviews the development and application of various approaches based on the views of academic circles.Finally,on the basis of summing up the experiences of other countries and the actual conditions of China,this study proposes the legal coordination approach that should be adopted when introducing foreign securities issuers.This study is divided into 8 chapters,Chapter 1 is the introduction,Chapter 8 is the conclusion,and the main parts are Chapter 2-7.Chapter 2 discusses several basic issues related to this study.This chapter defines the scope of the dissertation as "the issuer's public offering of securities and its listing in the overseas markets" and determines that the three major issues of market access,corporate governance and information disclosure should be the main research subjects.This chapter focuses on the analysis of several basic theoretical issues,such as "legal conflicts and legal coordination from the perspective of foreign securities issuers regulation”," classification of legal coordination approaches in regulation foreign securities issuers” and "basic considerations for regulatory body to determine approach to regulation foreign securities issuers".In this chapter,the definition of legal conflicts and legal coordination are clarified and the four basic approaches of legal coordination in regulating overseas securities issuers are determined.This chapter points out that when selecting within the four approaches,the regulatory bodies mainly weigh trade-offs between ensuring security goals,promoting efficiency goals,alleviating legal conflicts in different countries and promoting the development of the domestic economy and securities markets.This chapter lays a foundation for the following chapters.Chapter 3 studies the application of the national treatment approach in the legal coordination process in regulating foreign securities issuers.In market access matters,countries and regions tend to adopt national treatment for overseas securities issuers.This shows that as the first threshold for entering a country's market,countries will not easily give up their own legal provisions on market access for financial security reasons.In corporate governance matters,the U.S.Sarbanes-Oxley Act became the representative of the national treatment of corporate governance of overseas securities issuers.However,this approach has aroused the dissatisfaction of academia and listed companies,has also caused a certain decline in the attractiveness of the U.S.market,and practically proved that it is not advisable to apply national treatment to overseas securities issuers on the issue of corporate governance.In information disclosure matters,the United States,as the main analysis object,insisted on the national treatment of overseas securities issuers as a whole.In particular,regarding the issue of financial information disclosure and accounting standards,the United States has always adopted the more strict national treatment to foreign securities issuers.The application of national treatment to foreign securities issuers on the issue of information disclosure also reflects the need to protect the domestic investors in the host country.However,insisting on too rigid a national treatment is not conducive to the development and internationalization of the securities market.Combined with the above analysis,this chapter argues that as a starting point for the development of the legal coordination approach in regulating foreign securities issuers,the national treatment model is very historic.With the development of the international securities market,the national treatment model should still be applied to matters and regulations concerning the security of the country's financial market.However,it is inappropriate to apply the national treatment approach to matters that are too strict or have strong national characteristics compared to other countries.Chapter 4 studies the application of the exemption approach in the legal coordination process in regulating foreign securities issuers.In market access matters,regulators seldom apply the exemption approach to overseas securities issuers.The limited exemption is only applicable to formal and procedural matters in market access,which reflects the regulators' policy considerations in reducing the burden of foreign securities issuers.In corporate governance matters,the United States and Britain both adopt exemption approach for foreign securities issuers in history in order to release the foreign securities issuers as well as make their markets more attractive.However,the most profound reason is that the law of corporate governance is formulated to solve the special problems encountered by every country in handling the relations between the company,shareholders,management and other entities,thus having strong national attributes.It is often not necessary to enforce the host country's corporate governance requirements for foreign issuers.In the information disclosure matters,the UK has applied a more vigorous exemption for foreign securities issuers,while the United States has increasingly tightened its exemptions for foreign securities issuers,and each additional exemption will generate heated discussions during the legislative process.It shows that although the adoption of the exemption approach is simple and easy in legislation,it is difficult to meet the requirement of balancing the interests of all parties.Based on the above analysis,this chapter argues that the adoption of the exemption approach is a dynamic process.Once the exemption approach is adopted for the purpose of reducing the burden on the issuers of overseas securities,attention must be paid to the developments of overseas laws to ensure that there is an ongoing need for exemption to avoid regulatory arbitrage.With financial security as a fundamental goal,caution should be applied to the exemption approach and this approach should be applied primarily as supplement to other approaches of legal coordination.Chapter 5 studies the application of the integration approach in the legal coordination process in regulating foreign securities issuers.In the area of corporate governance,international organizations started their efforts to promote the integration of the standards in the early 21 st century.However,this practice has caused some controversy.Proponents argue that this is good for the integration of corporate governance rules,while opponents argue that due to the special nature of corporate governance matters,full integration of corporate governance systems in various countries cannot be achieved.In information disclosure area,the current larger-scale integration has begun to take place.IOSCO's non-financial disclosure standards and IASB accounting standards have been widely accepted internationally.It can be seen that due to the deepening of the internationalization of the securities market and the promotion of the strength of international organizations,integration of laws in the field of information disclosure is the general trend.Combined with the above analysis,this chapter argues that the integration approach does not exclude flexibility.Although the integration of laws and regulations in all countries is only an ideal state,to achieve the maximum possible agreement on the stipulations of various countries and to enhance market efficiency is an important goal of this approach.Information disclosure matters are the most suitable regulatory issues for adopting an integration approach and the progress is currently proceeding smoothly.However,there is still the possibility of integration in other regulatory matters that require the joint efforts of various countries and international organizations to explore.Countries and international organizations will become the most important driving force for the integration approach.Chapter 6 studies the application of the equivalence approach in the legal coordination process in regulating foreign securities issuers.Currently,the scope of application of equivalence approach in regulating foreign securities issuers is relatively narrow,and only the EU applies this approach in information disclosure matters.However,due to the characteristics and advantages of equivalence approach,there still exists great probability of further expanding its applicability.Different from the other three legal coordination approach,the application of the equivalent approach requires not only the relevant provisions in the law,but also the cooperation of detailed equivalence standards,rigorous equivalence certification procedures,bilateral cooperation mechanisms,continuous assessment mechanism.Thus,the use of equivalence approach may result in higher costs for host country regulators.This approach,however,helps to balance the regulatory objectives and achieve greater levels of legal coordination without the need to fully adopt international standards.The costs generated,on the other hand,can be offset by the benefits of adopting this approach.Therefore,the equivalence approach still has the probability of expanding its applicability in the future.It is especially applicable to corporate governance issues that other legal coordination models cannot receive good results and can also be more widely applied to information disclosure matters.Chapter 7,on the basis of the foregoing chapters,conducted a more in-depth analysis,mainly to solve China's problems.This chapter summarizes the experiences of various countries in choosing the legal coordination approaches and analyzes what factors should be considered when China introduces foreign securities issuers in determining legal coordination approach to regulating these issuers.It also focuses on the different coordination approach that should be adopted in different areas in view of the actual conditions of China and the objectives in opening its securities market to the outside world.In determining the legal coordination approach,we should consider the safety objectives in light of the current economic and capital market development in our country,consider the efficiency goals in light of the impetus and purpose of the opening of securities market and consider the goal of easing conflict of laws in light of the development of securities law in our country and their interaction with international law.For the determination of the specific coordination approach,national treatment approach should be adopted in market access,equivalence approach should be adopted in corporate governance,and integration approach should be adopted in information disclosure.The exemption approach can serve as a complement to the aforementioned approaches,especially the national treatment approach,but its application should be extremely cautious.Based on the construction of theoretical system and learning from the experience of other countries,this study confirms the legal coordination approach that should be adopted in regulating foreign securities issuers.After the introduction of foreign securities issuers,the actual conditions we face and the international environment will continue to change.However,the research methods,ideas and considerations raised in this study should continue to be applicable under new circumstances.