The International Organization of Securities Commissions (IOSCO) announced on Friday that global securities regulators have agreed to a new deal for sharing information and co-operating on cross-border enforcement that will enhance their ability to collect information about online activity.
IOSCO, the umbrella group of global regulators, has approved an enhanced version of its multilateral memorandum of understanding (MMoU), which sets out the terms of a mechanism for co-operation among the world’s regulators to facilitate enforcement.
The revised MMoU provides regulators with “new enforcement powers for responding to the challenges arising from recent developments in global financial markets,” IOSCO says.
These enhanced powers will enable regulators to share information related to audits; empower them to compel physical attendance for testimony; boost their ability to freeze assets; and enable them to obtain and share Internet service provider records and telephone records — but not including the content of those communications.
“The [new] powers will foster greater cross-border enforcement co-operation and assistance among securities regulators, enabling them to respond to the risks and challenges posed by globalization and advances in technology since 2002,” says Jean-François Fortin, chairman of IOSCO’s committee on enforcement and executive director, enforcement, at Quebec’s Autorité des marchés financiers (AMF).
“In particular, access to the ‘IT’ powers is important,” he adds, “because so many market abuse investigations rely on subscriber records and traffic data to show the passage of information.”
This has spurred IOSCO to develop “an enhanced standard on cross-border enforcement information exchange that goes beyond the MMoU” amid a variety of forces, including technological change, regulatory reform in response to the global financial crisis and the growth of market-based finance.
“The enhanced MMoU marks a turning point in cross-border enforcement co-operation and information sharing among IOSCO members,” adds Paul Andrews, IOSCO’s secretary general. “It raises the standards of enforcement action, making it increasingly difficult for wrongdoers to conduct cross-border misconduct in global securities markets.”
Signing the MMoU remains a condition of membership in IOSCO, but that the goal is for all MMoU signatories to eventually migrate to the enhanced MMoU, the group states.