In another achievement for the UAE and as part of its relentless efforts to boost the local markets’ attraction to investors, the Securities and Commodities Authority (SCA) has signed a multilateral memorandum of understanding (MMoU) with the International Organization for Securities Commission (IOSCO) after meeting all the MMoU’s prerequisites.
HE Abdullah Al-Turifi, SCA Chief Executive Officer signed the agreement for his outfit, having received it from David Wright, IOSCO Secretary General, during a ceremony held at IOSCO Headquarters in Madrid, Spain and attended by HE Dr. Hessa Abdullah Ahmed Al-Otaiba, UAE Ambassador to Spain, a number of members of the UAE diplomatic mission at the Embassy, IOSCO senior officials and foreign dignitaries from the securities industry.
The MMoU, which aims at boosting international cooperation in securities enforcement matters, is the first global multilateral information-sharing arrangement among securities regulators. It is also the instrument used by securities regulators to help ensure effective global regulation and preserve and strengthen securities markets around the globe.
The MMoU outlines the general framework of joint cooperation among signatories, including consultation, cooperation, sharing of information for securities enforcement, as well as the types and means of sharing the information.
In a post signing comment, Al-Turifi said: “By signing the MMoU, the SCA has accomplished one of most vital instrument international financial and investment institutions use in ranking markets worldwide. It is also a very important global recognition of the strength of UAE markets’ legislation and regulatory framework and this will positively reflect on the level of confidence of local and foreign investors and boost UAE local market attraction to foreign investors.”
“This agreement is another significant achievement for the UAE securities industry which was made possible by the unstinting support of the SCA board under the able chairmanship of HE Engineer Sultan bin Saeed Al-Mansoori, Minister of Economy,” Al-Turifi added and praised the SCA task force which successfully negotiated and coordinated efforts with the IOSCO evaluation team which assessed the SCA’s regulations and policies before giving it a very good pass mark.
By ratifying the MMoU, the SCA has successfully maintained its full membership of IOSCO. The international organization has set a deadline of January 1, 2013 for all IOSCO members to ratify the MMoU. No new member will be accepted without first ratifying the MMoU which will become a prerequisite for membership of the organization, while old members who failed to ratify it by the deadline will be placed on IOSCO Watch List. It will also be an indirect prerequisite for membership of the World Federation of Exchanges (WFE) as no financial market will be accepted as a WFE member without first being a member of IOSCO.
An evaluation team from IOSCO made field visits to the SCA within a period of three years to assess the SCA’s application and other attached documents. The team demanded and got a lot of explanation from the SCA. On the other hand, the SCA also held a number of meetings with the IOSCO evaluation team on the fringe of IOSCO annual conferences to discuss ways and means of meeting the IOSCO requirements.
The IOSCO team studied all UAE market legislations, analyzed all information and data and cross-checked them to verify if they conform to the IOSCO requirements.
The G20 has urged the IOSCO to continue with its efforts to improve upon the level of cooperation among its members by assisting them to meet all conditions of the MMoU, hence the international applause that greets any regulator which succeeds in ratifying the agreement.
Established in 1983, IOSCO’s primary objective is to establish and promote high international standards with a view towards promoting transparency and effectiveness of securities markets, reducing global systemic risk, facilitating cross-border cooperation, protecting investors and promoting market integrity.
IOSCO aims at boosting cooperation among its member market regulators, in addition to the World Bank (WB), the International Monetary Fund (IMF) and some various financial and monetary institutions. It is recognized as the international standard setter for securities markets and is the primary international cooperative forum for securities market regulatory agencies. IOSCO currently has over 200 members that regulate more than 95% of the world’s securities markets.