On 28 June 2004, the FOA, with the support of the Corporation of London, retained the international law firm Clifford Chance to analyse and compare EU and US licensing and business conduct rules relevant to the carrying on of transatlantic business in financial services business, particularly in equities and equity derivatives. At present the regulatory frameworks in the US and the EU are largely geographically based and need to change to take into account the increasingly global nature of providing financial services and products to meet customer demands. The purpose of this project – which is scheduled for completion by June 2005 – is to identify unnecessary regulatory inefficiencies, conflict, duplication, complexity or cost and put forward a “business case” as to how they should be prioritised and addressed in order to establish a more coherent and cost-efficient framework of regulation for the carrying on of transatlantic business.
Recognising the importance of the industry’s “business case” in meeting the needs of firms based in both the EU and US, the FOA and the BBA have been joined in this project by the Securities Industry Association and the American Bankers Association, which is represented on this project by its securities affiliate, the ABA Securities Association and its international affiliate, the Bankers Association for Finance and Trade.
Anthony Belchambers, Chief Executive, FOA, said: “it was always our wish that this initiative would become a genuine pan-EU/US transatlantic project, so we are delighted at being able to partner with two of the US’s leading industry associations in undertaking this work. It is our firm view that, if the investment and trading needs of customers and counterparties are to be delivered efficiently and cost-effectively, it is essential that the programme for “better regulation” of transatlantic business is commenced as soon as possible and with the participation of the financial services industry and end users as well as regulatory authorities on both sides of the Atlantic.”
Ian Mullen, Chief Executive, BBA, added that: “the boundaries of banking are no longer limited geographically. As banks increasingly expand their global presence, they need to comply with more and more diverse local regulations. A truly dynamic transatlantic market in financial services can only be achieved if regulation is workable and harmonised."
Richard Thornburgh, Immediate Past Chairman, Board of Directors, Securities Industry Association, in strongly supporting convergence towards an integrated, transatlantic capital market, added: “SIA strongly supports convergence toward integrated, transatlantic capital market. It is in the best interests of consumers, investors, and companies, as well as the global economy. We hope that this project will serve as a first step in the regulatory convergence dialogue, and contribute to the ongoing dialogue between U.S. and EU financial services officials and regulators. Enhanced cooperation and understanding can be used pro-actively to minimize regulatory differences and help make the transatlantic capital markets more efficient and accessible to investors and issuers."
Beth L. Climo, Executive Director, ABA Securities Association also commented that: “the global financial services market demands streamlined, consistent and compatible regulations that do not hinder transatlantic business and the flow of capital. We are very pleased to be a part of this project that focuses on the rules for equities and equity derivatives, and support its mission to reduce regulatory burden and redundancy.”
Becky Morter, Executive Director, Bankers’ Association for Finance and Trade added: “regulatory compliance for international banks and other financial firms grows more costly every day. We have to do all we can to eliminate redundant regulations that unnecessarily add to this burden. We look forward to working on this project and doing our part to limit regulatory dysfunction for our members and all internationally active financial institutions.”
