In light of Chancellor Merkel’s visit to Washington for the US-EU economic summit, the Securities Industry and Financial Markets Association (SIFMA), a member of the EU-US Coalition on Financial Regulation, today called for financial services regulatory convergence.
“The time is right for regulatory simplification and convergence in a world where national boundaries are giving way to a truly global economy,” said Marc Lackritz, SIFMA president and CEO. “Moving towards a regulatory framework that recognizes and facilitates the global marketplace is a necessary step to keep pace with the six trillion dollars in global, cross-border investment flows. We need healthier, principles-based regulation that eliminates redundancy and duplication.”
During a Financial Times interview in January, German Chancellor Angela Merkel said, “We [US and EU] have regulatory mechanisms governing our financial markets. We should be looking for ways to keep developing these together at a transatlantic level. We must watch out that we do not drift apart, but instead come closer together, where there are clear advantages for both sides.”
As US and EU leaders discuss global cooperation, SIFMA urges decision makers to keep in mind that regulatory convergence will:- Reduce Overlap and Promote Efficiency – US and EU financial services industries will benefit from a more coherently regulated and commercially efficient transatlantic marketplace.
- Expand Investor Protection – Investor protection will be strengthened through the development of common standards, irrespective of where the service originates, improving customer understanding, mitigating customer confusion and reducing risk.
- Facilitate Financial Services Operations – Financial service providers will benefit from the common internal processes and procedures across operational units in different countries, the use of common client account documentation and a unified approach to the identification and management of conflicts of interest.
- Improve Regulatory Cooperation – Regulators in different countries will acquire common understandings, develop greater trust and deeper working relationships, enhancing their ability to cooperate in supervisory and enforcement functions.
- Enhance Liquidity and Investment – Market infrastructure providers, particularly exchange and other platform operators, will be able to offer more efficient investment and capital-raising services and generate deeper pools of liquidity through enhanced and more cost-efficient cross-border dealings.
