Securities and Exchange Commission Historical Society

The Imperial SEC? - Foreign Policy and the Internationalization of the Securities Markets, 1934-1990

Internationalization of the Securities Markets

The Thomas Article

"The question is not whether Americans will purchase foreign securities; the question is where they will purchase foreign securities – in the markets of the United States, or in the securities markets of Europe, Asia, Africa and Latin America."

- January 1982 "Internationalization of the Securities Markets: An Empirical Analysis," by Barbara S. Thomas, in "Foreign Issuers," The George Washington Law Review

A number of SEC Commissioners were committed to the further internationalization of the U.S. securities markets. Barbara Thomas, who joined the Commission in 1980, made it her mission to specialize in and promote the internationalization of the securities markets.

In a 1981 law review article, Thomas wrote that in 1970 Americans owned $6.4 billion in foreign stocks; by 1980, that number was $18.9 billion. She lamented that few foreign companies had ever completed an offering in the United States and that enticing foreign companies to do so would benefit U.S. investors through better disclosure, increased investment opportunities, greater research capability, and lower transaction costs.

In a call to the SEC, Thomas wrote "It is incumbent upon the Commission to examine whether it can reduce the legal barriers to entry by foreign issuers…. [F]acially equal rules create significant barriers to foreign entry into the United States capital markets because of numerous practical differences between foreign issuers and American issuers."(75) Thomas thus gave credence to the objections that foreign issuers had been voicing since the 1930s.

By the early 1980s, the SEC had attempted to ease a variety of rules for foreign issuers. Some of these amendments included modifying a number of reporting requirements and allowing the use of foreign financial statements with footnote disclosures about material differences between foreign accounting standards and U.S. standards.(76) Yet these new rules were often slow in the making. Furthermore, at certain times, the SEC seemed more interested in extending its extraterritorial jurisdiction in enforcement proceedings than in accommodating foreign issuers' access to U.S. markets.

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(75) January 1982 "Internationalization of the Securities Markets: An Empirical Analysis," by Barbara S. Thomas, in "Foreign Issuers," The George Washington Law Review (courtesy of Barbara S. Thomas Judge)

(76) SEC Exchange Act Release No 16,371

Related Museum Resources


January 1982
image pdf (Courtesy of Barbara S. Thomas Judge)
May 31, 2006
transcript pdf

Oral Histories

13 November 2005

Barbara Thomas Judge

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