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As part of a coalition of 11 European and North American trade associations, the Securities Industry and Financial Markets Association (SIFMA) today released a report on improving cross-border financial services regulation.
“The transatlantic financial services market is a major driver of the global economy, and reducing unnecessary and duplicative regulations produces significant efficiencies and cost savings for market participants and investors. With transatlantic cross-border stock and bond trading nearing $40 trillion per year, investors will benefit significantly from a more coherent regulatory framework,” said Bertrand Huet, managing director, European Legal & Regulatory Counsel, for SIFMA in London.
“Reducing barriers in the transatlantic financial market will enhance competition, decrease costs, and broaden customer choice and streamline financial services regulation. This, of course, requires cooperation among regulatory authorities who also derive serious and lasting benefit from enhanced contacts and consistent dialogue,” said David Strongin, managing director of SIFMA, in New York.
SIFMA has long advocated U.S. and EU efforts at the technical level to enhance and strengthen regulatory cooperation and understanding. SIFMA also supports immediate modernization of Securities and Exchange rule 15a-6, which governs how foreign securities firms are able to interact with U.S. clients, and the reform of which could dramatically reduce unnecessary regulatory barriers.
The cooperative report, titled, “The Three Gateways to Modernizing the Regulation of Cross-Border Transatlantic Business”:
(a) emphasizes the need for more open transatlantic rights of access to non- domestic markets, products and services (particularly pressing in the context of wholesale institutional business);
(b) proposes the adoption of three “gateways” to establishing greater international regulatory coherence, namely, exemptive relief (essentially for wholesale business), regulatory recognition and “targeted” rules’ convergence;
(c) argues for regular and consistent industry input into the transatlantic regulatory dialogue to ensure that its commercial as well as its regulatory targets are delivered;
(d) prioritizes several areas of regulation where financial service providers and their counterparties and customers would benefit from greater harmonization;
(e) proposes measuring regulatory quality and establishing an internationally acceptable basis for recognition are the IOSCO “Objectives and Principles of Securities Regulation.”
