Vanderbilt Journal of Transnational Law


Patrick J. Paul

First Page



As the twenty-first century approaches, the world is undergoing massive change. Social, political, and economic barriers are being torn down; new alliances are forming, as are new barriers. Economic stability and supremacy have replaced military supremacy in the hierarchy of a nation's policy objectives. The European Community's move toward a single market exemplifies this policy shift.

This Note focuses on one element of these global changes--internationalization of the securities market. The Note begins with an overview of the international securities market and the reasons for its increased globalization. The Investment Company Act of 1940 (the 1940 Act) that, in part, regulates international investment company activity is examined. The author suggests that because section 7(d) of the 1940 Act continues to act as a barrier to foreign investment companies marketing their shares in the United States, and to United States investment companies seeking to market their shares abroad, it should be amended. The Note then evaluates the European Community's UCITS Directive and proposes it as a model for section 7(d) amendment. The author concludes that if investor protection and investment company regulation is substantially similar in a particular state, investment companies domiciled in these states should be permitted to market their shares in the United States, provided United States investment companies are accorded reciprocal treatment.