The Securities and Exchange Commission Goes Abroad to Regulate Corporate Governance

Roberta S. Karmel, Brooklyn Law School

Abstract

Foreign issuers comprise over ten percent of the issuers registered and filing reports under the Securities Exchange Act of 1934. This article considers the application of the Sarbanes-Oxley Act of 2002 to such foreign issuers. After tracing the fluctuating policies of the Securities and Exchange Commission with regard to foreign issuers, from isolationism to internationalism to unilateralism, the article discusses the provisions of Sarbanes-Oxley which impinge upon the corporate governance of foreign issuers. The negative reactions of foreign issuers to many of these provisions is explained. The author then speculates on the possible implications of the new foreign issuer regulatory regime, asserting that it may lead either to fewer foreign issuers entering the SEC reporting system or improvements world wide in corporate governance