Regulation S and Rule 144A : Creating a Workable Fiction in an Expanding Global Securities Market

Technological advances and the ever growing desire for inexpensive capital have resulted in the internationalization of the securities markets. During the past two decades, for example, the international bond market has grown at an impressive rate. Consistent with this development, international bond issues also have increased at an expeditious pace. This globalization of the securities markets gives rise to a host of regulatory issues. The adoption of Regulation S constitutes one of the Securities and Exchange Commission’s more important steps towards expanding global trading. The Commission's promulgation of Rule 144A also promotes this goal and remains a vital component of the SEC's regulatory framework in the globalization setting. This article discusses the relationship between Regulation S and Rule 144A and their role in facilitating a market for foreign securities in the United States. To provide the necessary background, the article first discusses the regulatory framework, which existed prior to the adoption of Regulation S