IOSCO principles on cross border supervisory cooperation
25 May 2010
The Principles set out how securities regulators can better build and maintain cross-border cooperative relationships that will allow them to more effectively oversee financial services providers such as investment advisers, asset managers, hedge funds and credit rating agencies.
The International Organization of Securities Commissions (IOSCO) has published a set of Principles Regarding Cross-Border Supervisory Cooperation developed by its Technical Committee’s Task Force on Supervisory Cooperation.
These Principles, accompanied by a report and sample Memorandum of Understanding (Sample MOU), set out how securities regulators can better build and maintain cross-border cooperative relationships that will allow them to more effectively oversee financial services providers such as ,investment advisers, asset managers, hedge funds, credit rating agencies, exchanges and clearing houses, that operate in multiple jurisdictions.
The objective of these Principles is to assist regulators in determining the form of cooperation best suited to the regulatory task at hand, and outline the critical issues that experience has shown regulators should agree upon when building a supervisory cooperation arrangement.
The Task Force co-chairs, Kathleen Casey, Chairman of the Technical Committee, and Jean-Pierre Jouyet, Chairman of the Autorité des marchés financiers of France, said:
“Supervisory cooperation involves the exchange of day-to-day oversight information outside of an enforcement context. Where financial firms or other market participants operate across borders, financial regulators can benefit from sharing information they have collected with their overseas counterparts, as this can assist each regulator in recognizing potentially troublesome trends, help identify common concerns and improve
The Principles for Supervisory Cooperation
The IOSCO Principles for Supervisory Cooperation focus on three elements of successful supervisory cooperation:
1. General principles – which describe the usefulness of cooperation and the types of information and consultation that regulators should share and engage in;
2. Principles on the mechanisms for cooperation - which describe the functioning of memoranda of understanding, supervisory colleges and regulatory networks; and
3. Principles relating to the mechanics of cooperation, such as the basic principles of constructing a supervisory cooperation MOU.
© IOSCO
