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The Imperial SEC? - Foreign Policy and the Internationalization of the Securities Markets, 1934-1990

Foreign Technical Assistance

Technical Assistance in the 1970s

"Throughout the world, nations are calling upon Commission personnel and other experts in American securities law to assist them in developing systems of disclosure that resemble very closely the one we have in this country."

- September 27, 1973 "Required Disclosure in the Stock Market: The Other Side," Address by SEC Commissioner A.A. Sommer, Jr. to The Conference Board (courtesy of the estate of John R. Evans; made possible through a gift from Quinton Seamons)

SEC staff members recall multiple missions to foreign countries funded by USAID or the various development banks. One remembers that the SEC's relationship with the Inter-American Development Bank was a longstanding one and that numerous SEC missions to South America were funded by the Bank.

By the end of the 1960s, representatives from foreign countries, along with state securities commissioners, were invited to the SEC's two-week training sessions on enforcement. In 1969, representatives from Canada, France, and Brazil attended the session.(56) The SEC later boasted that it had been providing technical assistance to Japan for years, was working with countries throughout Latin America, and had recently begun to provide technical assistance to Kuwait.

Staff members who served as technical assistants were often sensitive to cultural differences. Many of these experts, however, believed that U.S-style securities regulation, with its emphasis on disclosure, a single specialized and centralized securities regulator, and a structure of stock exchanges as self-regulatory organizations, represented the pinnacle of a mature market structure. As such, they seemed to believe that it was a system of regulation which all countries should pursue.

While technical assistants sought to spread this message, the SEC invoked such missions as evidence that the U.S. had the best securities regulation in the world. Such sentiments styled the SEC's efforts as neutral, apolitical, and chosen by the foreign government rather than as part of U.S. Cold War policy, financed by the U.S. and part of much larger aid packages. Furthermore, the SEC used its overseas activities to bolster its domestic image at a time when its reputation was on the wane.(57) As Chairman Ray Garrett, Jr. recognized, "It seems curious that such doubts [about the SEC] are expressed at home at the same time that the strengths of our system are being increasingly appreciated abroad. For some years now, the SEC has carried on a thriving export trade, helping other countries understand our system and adapt it to their domestic needs." Like a good missionary, Garrett proudly announced that foreigners had become "converts."(58)

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