SEC and FSA review co-operation agreement
Feb 02, 2010
US and UK regulators discuss strengthening cross-border governance
In the 5th annual strategic dialogue between the SEC and the UK’s Financial Services Authority the two regulatory bodies agreed to boost joint supervisory cooperation. As the international regulatory environment evolves and business becoming more global it is becoming increasing important for national oversight bodies to work together to ensure smooth multinational operation and ensure effective monitoring and compliance structures.
A range of topics were discuss during the meeting which involved SEC commissioner Mary Schapiro, FSA chairman Adair Turner and FSA CEO Hector Sants including: corporate governance and executive compensation; asset risk disclosure; regulation of hedge funds and investment advisors; market infrastructure and oversight of OTC derivatives; general market supervision; and cross-border monitoring and enforcement.
The central platform of increased cooperation in the Memorandum of Understanding concerning consultation, cooperation and the exchange of information related to the supervision of financial services firms and market oversight which was first signed in 2006. The February meeting resulted in a plan to review and expand the MoU.
The Dialogue also provided for an opportunity to continue discussions about corporate governance, particularly board risk oversight, and executive compensation. Consistent with the emerging international consensus, both agencies' current efforts seek to address, among other things, the intrinsic links between the types and degree of risk a regulated entity/registrant assumes and their corporate governance and compensation policies.
Schapiro said, ‘This Dialogue has proven its utility again in allowing the SEC and FSA to share expertise and experiences regarding the rapid changes occurring in our capital markets. As regulatory reform advances on both sides of the Atlantic, we can feed this combined body of knowledge into the development of high-quality regulatory systems that take into account both national and international market dynamics.'
‘Global cooperation between regulators is central to tackling the reform agenda,’ said Sants ‘and the relationship between the FSA and the SEC is key for international markets. Our ongoing dialogue gives us the opportunity to widen the areas of cooperation between the FSA and the SEC, in particular progressing our collaborative work on hedge funds and credit rating agencies.’
By Brendan Sheehan