Trans-Atlantic Coalition Calls for Global Securities Regulations

The EU-US Coalition on Financial
Regulation is calling on policy makers in the US and the European Union (EU) to
resume discussions of a framework to regulate the trade of securities,
derivatives, and other financial instruments. 

The Coalition was established in 2005 to
encourage governments and regulatory authorities in Europe and the U.S. to move
forward on inter-jurisdictional regulatory recognition and exemptive relief on
the basis of regulatory compatibility, and where possible to establish
appropriate mutual rules.  The overall
objective is to facilitate customer choice and market access to financial
services on a global basis.

The Coalition commissioned the international law firm Clifford Chance LLP to
produce a report on the need to resume a dialogue to establish a framework of
transatlantic inter-jurisdictional regulatory accreditation and recognition. These
discussions were abandoned when the financial crisis hit in 2008.

The new report, Inter-jurisdictional
Regulatory Recognition: Facilitating Recovery and Streamlining Regulation,
a call by the G20 in 2010 for vigilance “to ensure open capital markets and
avoid financial protectionism”.  A press
release from the eleven Association members* of the Coalition states they have
become increasingly concerned by growing elements of regulatory
extraterritoriality and protectionism in both the EU and US programs for
regulatory overhaul, which are increasingly inconsistent with this G20 call for

The report states that while it recognizes there are differences in the
overarching legal systems and in the market practices and regulatory priorities
of the EU and the US, there is a common foundation between their regulatory
policies, objectives, standards and outcomes. These are sufficient to secure a
level of regulatory inter-reliance that will help to sustain the international
competitiveness of transatlantic businesses. 
“Importantly, such an approach will also reduce legal risk, compliance
complexity, regulatory uncertainty and transactional costs that will flow from
what is an increasingly fragmented regulatory approach.”

The report states that International Organization of Securities Commissions’
(IOSCO’s) “38 Objectives & Principles of Securities Regulation” issued in
1998 and updated in 2010 provide an internationally-accepted foundation of
regulatory adequacy. The Coalition recognizes, however, that regulatory
interdependence will require a greater degree of in-depth analysis and due diligence,
if it is to be credible and effective but it does provide a credible
starting-point for building international regulatory accreditation.

*American Bankers Association Securities Association,
Association of Financial Markets in Europe, Bankers’ Association for Finance
and Trade, British Bankers’ Association, Futures Industry Association, Futures
and Options Association, International Capital Market Association, Investment
Industry Association of Canada, International Swaps and Derivatives Association

Securities Industry and Financial Markets Association, Swiss Bankers Association

…(read more)

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