U.S. SEC, U.K. FSA, Sign Landmark Regulatory Agreement

On March 14, 2006, a press release issued by the U.S. Securities and Exchange Commission (SEC) announced the signing of a "landmark agreement" for increased international regulatory cooperation between the SEC and the U.K.'s Financial Services Authority (FSA). Signed by SEC Chairman Christopher Cox, and FSA Chairman John Tiner, the agreement is in the form of a Memorandum of Understanding (MOU) entitled, "Memorandum of Understanding Concerning Consultation, Cooperation and the Exchange of Information Related to the Supervision of Financial Services Firms and Market Oversight" (the MOU). Among other things, the MOU provides for the exchange of information about regulated entities and investment banking groups that operate both in the United States and the United Kingdom. An archived webcast of the signing of the MOU is available on the SEC's website.

Announcing the signing of the MOU, SEC Chairman Christopher Cox stated, "The additional tools for information exchange that we will gain from this arrangement will enhance our mutual ability to oversee the world's largest securities firms and markets." He added, "This arrangement also facilitates the SEC's new role as a consolidated supervisor of globally active US investment banks." FSA Chairman John Tiner stated, (in a separate press release issued by the FSA ), "This arrangement builds upon the existing framework for exchanging information between our two institutions, when this is necessary, as part of our day to day supervision of firms operating in both the US and UK. We already work closely with the SEC; this MOU will facilitate that process by setting out the basis on which we will do this."

In other international news, Ethiopis Tafara, SEC's Director of the Office of International Affairs, recently gave a speech entitled, "How Much Regulation is Just Enough?" The speech, delivered at the International Foundations for Sound Finance Conference in Prague, Czech Republic on Feb. 28, 2006, focused on risk-based regulation and the Sarbanes-Oxley Act. A summary of Tafara's speech is available on FEI's website.

Prepared March 14, 2006 by Edith Orenstein (eorenstein@fei.org), Director, Technical Policy Analysis, Financial Executives International (FEI). This summary does not represent FEI opinion, unless specifically noted above.