Single Stock Futures and Cross-Border Access for U.S. Investors by ProQuest


In the face of growing demand by US investors for access to foreign markets and pressure to restore US capital markets competitiveness, the Securities and Exchange Commission (SEC) is gradually negotiating mutual recognition arrangements with select foreign markets -- arrangements that will allow foreign exchanges and brokers to operate in the US without direct SEC oversight. The amount of regulatory energy being expended by the SEC to determine how to agree on comparable standards with foreign regulators is puzzling given the SEC's long-standing antipathy to financial innovation at home and its competitive attitude toward the Commodity Futures Trading Commission. This contradiction is no more apparent than in the case of single stock futures (SSF). SSFs are futures contracts based on the shares of individual companies. This paper argues that the SEC should recognize the advantages of SSFs to cross-border investment and relinquish its opposition to SSF trading in the US.

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