At their annual conference in Beijing Wednesday, global securities regulators are touting the importance of cross-border enforcement co-operation.
The International Organization of Securities Commissions (IOSCO) is celebrating the 10th anniversary of its Multinational Memorandum of Understanding (MMoU), which allows regulators to share information and co-operate in their enforcement efforts. Wednesday, four more IOSCO members signed on to the MMoU, bringing the total number of signatories to 86, covering more than 94% of the world’s securities markets. The new signatories include regulators from Malaysia, Peru, Egypt and Mauritius.
IOSCO says that the increase in signatories over the last decade has led to a sharp upsurge in cross-border co-operation, “enabling regulators to investigate a growing number of insider traders, fraudsters and other criminal offenders”. It reports that in 2006, a total of 520 requests for assistance were made pursuant to the MMoU; by 2010, the annual figure had exceeded 1,600.
And, it says that it’s committed to eradicating any potential safe havens for securities fraudsters, by ensuring that all of its members become signatories to the MMoU as quickly as possible. Wednesday, it approved a resolution that allows it to take tougher measures to encourage compliance by IOSCO members who have not yet signed the MMoU.
“The new resolution is designed to assist these non-signatories in overcoming the obstacles they often encounter in securing support from their governments or legislatures for implementing the legal and regulatory changes required for compliance with the MMoU,” it says.
The resolution calls for: IOSCO to ensure that a comprehensive program of technical assistance and political support is made available to non-signatory members to enable them to make the changes necessary to sign the MMoU; starting in January 2013, it will publish a watch list of members who have not become MMoU signatories; and, it will consider other measures, such as limiting the ability of non-signatories to influence IOSCO decision making.
IOSCO says that the MMoU provides a mechanism through which securities regulators share with each other essential investigative material, such as beneficial ownership information, and securities and derivatives transaction records. It sets out specific requirements for the exchange of information, ensuring that no domestic banking secrecy, blocking laws or regulations prevent the provision of enforcement information among securities regulators. Before it existed, IOSCO members relied upon bilateral agreements to obtain cross-border information and technical assistance.