16 May 2012

IOSCO: Ten years of enhancing cross-border enforcement cooperation

The Annual Conference of IOSCO marks the 10th anniversary of the Multinational Memorandum of Understanding, the instrument used by securities regulators to help ensure effective global regulation, and preserve and strengthen securities markets around the globe.

The Multinational Memorandum of Understanding (MMoU) has provided securities regulators with the tools for combating the cross-border fraud and misconduct that can weaken global markets and undermine investor confidence.

“The MMoU has created a groundswell change in what securities regulators are able to do”, said Mark Steward, Executive Director of Enforcement at the Hong Kong Securities and Futures Commission.

“Cross-border cases that could not have been investigated 10 years ago can now be investigated and brought before relevant courts and tribunals. This is happening with increasing frequency in Hong Kong, with a number of insider-dealing and market-manipulation cases involving foreign defendants before the courts and tribunals in Hong Kong”, Mr Steward said.

That sentiment was echoed by Ethiopis Tafara, Director of the Office of International Affairs of the US Securities and Exchanges Commission, who said: “Throughout the 10 years that the US SEC has been a signatory to the IOSCO MMoU, the ability to turn to an increasing number of information-sharing partners through the MMoU has been critical to the success of many of our investigations and proceedings. Now with more than 80 signatories, the MMoU's breadth spans the globe many times over, telling fraudsters there is nowhere to hide.”

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, including bank and brokerage 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.

Georgina Philippou, the Co-Chair of the MMoU Screening Group, said: “The MMoU has made a real difference in the world of international enforcement, raising the standards of enforcement action, encouraging cooperation among international regulators, and making it more difficult to conduct market misconduct in an increasingly cross border environment”.

Press release

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