Securities markets regulation

This chapter provides a nuanced analysis of the scholarly debate on the optimal level of disclosure in securities regulation, focusing on the dynamic interplay between regulatory competition, international harmonization, and geopolitics. The chapter critically examines the impact of increased competition among global stock exchanges. Two recent regulatory reforms, the listing of dual-class share firms and special purpose acquisition companies in Asian and European stock exchanges, serve as primary case studies. Contrary to fears of a “race-to-the-bottom,” the findings indicate that heightened competition does not necessarily compromise regulatory standards. Instead, foreign exchanges have demonstrated caution, adopting governance safeguards that differ notably from U.S. practices. Furthermore, the chapter explores the role of international harmonization in bridging gaps left by market competition and governmental interventions. It highlights the influence of international organizations in shaping U.S. reforms on environmental, social, and governance (ESG) issues and climate-related disclosures, illustrating how these efforts complement domestic regulatory frameworks while also facing challenges due to their soft-law nature and potential conflicts with local political agendas. Lastly, the significance of geopolitics in securities regulation is underscored through an analysis of the increasing tensions between the U.S. and China since 2018. This geopolitical landscape has influenced international equity financing, particularly through legislative actions such as the Holding Foreign Companies Accountable Act of 2020, posing substantial de-listing risks for U.S.-listed Chinese firms. The chapter concludes that with the rise of protectionism and a shift towards deglobalization, geopolitics is poised to become an increasingly vital factor in global securities regulations.