US Shareholders in Foreign Bids - A New Approach?

The Securities and Exchange Commission (SEC) has been very concerned about the exclusion of US holders from foreign bids. This is part of a general concern that the SEC's rules should not act as a barrier that actually disadvantages the US market in an international context. Because of this concern, the SEC has recently issued a release asking for comment on a new conceptual approach to the treatment of US holders in foreign bids. Under the proposed approach, it would be permissible to extend a foreign bid to a small percentage of US holders under the procedures and using the disclosure documents of the home country without compliance with normal US rules. The concept release was issued against the background of a July 1989 release proposing a multijurisdictional disclosure system (MDS) providing mutual recognition of home-country disclosure by the US and Canada.