SECs next steps towards mutual recognition

24 March 2008

The SEC announced a series of actions it intends to take to further the implementation of the concept of mutual recognition for high-quality regulatory regimes in other countries. "The steps are designed to better coordinate SEC regulation of the U.S. capital markets with our counterparts' regulation in the larger global marketplace," said SEC Chairman Christopher Cox.

 

The SEC will explore initial agreements with one or more foreign regulatory counterparts, and considers a formal process for engaging other national regulators on the subject of mutual recognition.

 

It is aimed to develop a framework for mutual recognition discussions with jurisdictions comprising multiple securities regulators tied together by a common legal framework, including Canada and the EU.

 

As for the US market, the SEC intends to propose reforms to Rule 15a-6 in order to improve the process by which U.S. investors have access to foreign broker-dealers.

 

The regulatory overlap from different national securities regulatory regimes can pose impediments to cross-border trading, the SEC states. This overlap can result in additional costs for U.S. investors and regulatory compliance burdens on market participants without consideration of whether such costs afford any additional meaningful investor protections.

Press release

 

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