28 January 2004

Donaldson on the US-EU regulatory relationship

William Donaldson, chairman of the US Securities and Exchange Commission, addressed an EPC breakfast briefing on the EU-US regulatory relationship on 26 January 2004. The meeting was chaired by EPC Senior Policy Advisor Graham Bishop.

The US Securities and Exchange Commission is planning to strengthen relations with its closest counterpart in Europe in an attempt to avoid further regulatory conflicts between the US and the European Union. The move to establish formal ties with the CESR also underlines the growing importance of the Paris-based body.

Mr Donaldson said the SEC's close working relationship with Europe's financial services regulators was built on a common commitment to investor protection and the integrity of all markets. But he believed more could be done as efforts continued to develop global accounting standards. That was why he had asked the SEC's Office of International Affairs to explore a more formal framework for collaboration and cooperation with the Committee of European Securities Regulators (CESR), whose members represent all EU countries.

This 'enhanced cooperation', involving increased information-sharing, more effective trouble-shooting and better monitoring of players in the markets, would help the US and EU regulators to better carry out their mandates in today's financial markets. And greater convergence of regulatory approaches would reduce the regulatory burden on cross-border business while maintaining high standards of investor protection.

The goal was a relationship, which was 'less reactive and more pro-active.' This would be critical in an era of increasing cross-border fraud, requiring the involvement of multiple regulators and law enforcement bodies. Mr Donaldson expressed confidence that the US-EU regulatory relationship would continue to grow stronger as shared challenges were addressed in a changing capital markets landscape.

Full speech
EPC report
British financial newspaper
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© Graham Bishop