The Extraterritorial Reach of the Federal Securities Code: An Analysis of Section 1905

Section 1905 of the proposed Federal Securities Code\u27 sets forth the applicability of the Code to transnational securities transactions. The drafters could have stated in each provision of the Code whether and to what extent it was to apply extraterritorially. Instead, they placed in one section a set of general principles that cuts across all other sections of the Code and indicates which sections are to have extraterritorial application. The result is a descriptive guide that relies on a classification of transactions rather than a section-by-section enumeration... This Article will not analyze the existing cases, except to the extent they offer instruction as to the effect of applicable international law. Instead, it will examine the drafters\u27 approach to extra-territoriality and then judge whether section 1905 affords reasonable predictability as to the Code\u27s coverage of transactions with foreign elements and whether it strikes an appropriate balance among the competing goals of United States public policy respecting regulation of transnational securities transactions