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19 Cal. W. Int'l L.J. 129 (1988-1989)
International Securities Trading: The United States and Great Britain Develop Clearing and Settlement Procedures for a New Age

handle is hein.journals/calwi19 and id is 137 raw text is: COMMENTS
INTERNATIONAL SECURITIES TRADING: THE UNITED
STATES AND GREAT BRITAIN DEVELOP CLEARING
AND SETTLEMENT PROCEDURES FOR A NEW AGE
INTRODUCTION
Trading in international securities1 is an increasingly attractive
way to diversify investments. Investors can choose from a wide
range of equity and debt instruments, without limiting themselves
to U.S. securities.' This provides the investor with greater flexibility
to take advantage of healthier economies, minimize exposure to
short-term erratic behavior on one nation's stock or bond market,
and protect assets from temporary weakness of the U.S. dollar.'
The volume of trading in international securities is expanding at a
rapid pace. Worldwide investment in international equities in-
creased from $750 billion in 1986 to $1.3 trillion in 1987. Invest-
ment in Eurobonds is also skyrocketing, reaching over $3 trillion in
1987.5
Both U.S. and foreign investors are participating in the ex-
panding international securities market. In the first half of 1986,
1. International securities can be classified into two types of transactions. The first
involves a domestic investor who buys or sells securities on a foreign stock market through an
integrated multinational market network. The second type involves foreign securities bought
and sold on the U.S. stock market, and U.S. securities traded on a foreign stock market.
Division of Market Regulation, Securities & Exchange Commission, International Trading
and Global Securities Markets, in BROKER-DEALER INSTITUTE 1987 123, 130-31 (1987).
2. For example, an investor may be interested in foreign government securities, or for-
eign stocks and bonds issued by corporations like British Petroleum, Bass Ltd., Guinness,
L'Or6al, Credit Suisse, BMW, Nippon Steel, or Toshiba.
3. Jakira, Diversify Your Investments Internationally, 71 A.B.A. J., Sept. 1985, at
120. These are factors to consider in choosing the securities market with the best growth in
the type of investment the investor seeks.
4. Telephone interview with David Strongin, Director of International Finance, Securi-
ties Industry Association, New York City (July 19, 1988). This is a significant increase over
the $400 billion traded in 1985.
5. Id. Mr. Strongin noted it is difficult to obtain accurate figures for international bond
trading because it is such a huge market, but provided this estimate.

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