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FSA and SEC to expand supervisory cooperation

The FSA and the US Securities and Exchange Commission have agreed to expand their supervisory cooperation and review the existing memorandum of understanding between the two regulators.

FSA chairman Lord Turner and chief executive Hector Sants today met with SEC chairman Mary Schapiro as part of the SEC-FSA Strategic Dialogue, established in 2006 to collaborate on current matters affecting the US and UK capital markets.

At the meeting Schapiro, Turner and Sants agreed that, given the linkages between the US and UK markets, enhanced supervisory cooperation is critical to market integrity.  

The FSA says cooperative efforts between the two agencies are increasing in areas such as oversight of credit rating agencies, hedge fund advisers and the clearing of OTC derivatives.  

To facilitate this the two agencies plan to review the existing memorandum of understanding concerning consultation, cooperation and the exchange of information related to the supervision of financial services firms and market oversight.

The memorandum was developed in 2006 and was designed to promote the coordination of robust and sound supervision of cross-border financial institutions and markets.

The FSA says some of the areas discussed during today’s meeting include corporate governance and executive compensation, regulation of hedge funds and investment advisors and the protection of customer assets and disclosure regimes around client asset risks.

They also discussed market infrastructure, particularly relating to central counterparties for OTC derivatives, market supervision and cooperation on cross-border supervision.

Sants says: “Global cooperation between regulators is central to tackling the reform agenda and the relationship between the FSA and the SEC is key for international markets.  

“Our ongoing dialogue gives us the opportunity to widen the areas of cooperation between the FSA and the SEC, in particular progressing our collaborative work on hedge funds and credit rating agencies.”

Schapiro adds: “This Dialogue has proven its utility again in allowing the SEC and FSA to share expertise and experiences regarding the rapid changes occurring in our capital markets.  

“As regulatory reform advances on both sides of the Atlantic, we can feed this combined body of knowledge into the development of high-quality regulatory systems that take into account both national and international market dynamics.”


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There is one comment at the moment, we would love to hear your opinion too.

  1. A previous SEC Chairman told me I was like a ‘breath of fresh air’, unfortunately it was because of my rather outspoken criticism of the FSA under the control of John Tiner who is now mopping up the life offices his regulators reduced to holding out the begging bowl.

    HM Treasury called in the life offices to ask why they were in such a mess, the ABI came out with the old ‘a big boy did it’ namely the IFAs who were far too demanding which meant that 40% of all life office expenses where eaten up by commission, hence the Callum McCarthy ‘system is bust’ statement and the RDR shambles.

    I’m sorry but regulation is still bust, when will they fix it? One former FSA senior man who is now with the Tory team has admitted that they ‘got it wrong’, if we all worked together could we make it better? No more Kenmir Effects please and let’s concentrate on the mess this side of the Atlantic before we fly off to the US to make empty promises.

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