Regulation of Global Futures Markets: Is Harmonization Possible or Even Desirable?

The February 1995 collapse of the British merchant bank, Barings Plc, and the announcement in June 1996 by the Sumitomo Corpora- tion of copper trading losses in excess of 2 billion dollars are only two of the more recent events underscoring the global complexity of finan- cial markets today. The failure of Barings resulted from unhedged proprietary positions in the Nikkei 225 on the Singapore International Monetary Exchange (SIMEX) and the Osaka Stock Exchange. This precipitated actions by financial regulatory and market authorities in Singapore, Japan, Hong Kong, the United Kingdom, and the United States. The events surrounding Sumitomo spanned three jurisdictions: the United Kingdom, where Sumitomo was trading on the London Metal Exchange (LME), the United States, where the LME recently had established a warehouse for delivery of copper (and where copper is traded on the New York Mercantile Exchange), and Japan, where Sumitomo is legally domiciled