Cross border regulation

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IOSCO Multilateral Memorandum of Understanding


The MMOU provides a mechanism through which securities regulators share with each other essential investigative material, such as beneficial ownership information, and securities and derivatives transaction records, including bank and brokerage records. It sets out specific requirements for the exchange of information, ensuring that no domestic banking secrecy, blocking laws or regulations prevent the provision of securities enforcement information amongst securities regulators.

The International Organization of Securities Commissions (IOSCO) has announced that it has achieved its goal, set in 2005, of having its eligible membership sign onto or committed to sign the Multilateral Memorandum of Understanding concerning Consultation, Cooperation and the Exchange of Information (MMoU).

Multilateral Memorandum of Understanding

The goal was achieved at the last meeting of the Chairs of the Executive, Technical and Emerging Markets Committees, at the conclusion of which the Conseil du Marché Financier of Tunisia was invited to become the latest full signatory to Appendix A of the MMoU. From IOSCO’s eligible membership of 115 securities regulators, 96% now meet the requirements needed to become signatories to the MMoU, or have made the necessary commitment to seeking national legislative changes to allow them to do so in the near future. The 64 full MMoU signatories can now request and share confidential information in the pursuit of cross-border securities offences. IOSCO’s rigorous expert assessments found that these jurisdictions are fully compliant with the cooperation and enforcement requirements of the MMoU.

The majority of the remaining eligible IOSCO members, a further 46, have indicated their commitment to seeking the changes necessary to become signatories. A small number of members have yet to formally enter the process and are likely to receive technical assistance to help them meet the minimum requirements.

The MMoU has been instrumental in a number of recent enforcement cases in various jurisdictions and 2008 saw 867 information requests made by IOSCO members to fellow regulators. This is an increaseof 18% from 736 requests made in 2007 and almost double the 384 requests made in 2005 when IOSCO decided to require all members to sign the MMoU.

The MMoU was developed following the events of 11 September 2001, when IOSCO created a Special Project Team to explore actions that securities regulators could take to expand cooperation and information sharing. Subsequently at its 2005 Annual Conference, in Colombo, Sri Lanka, IOSCO’s Presidents Committee, representing all members, decided that all ordinary members and associate members with primary responsibility for securities regulation in their jurisdictions should have applied for and been accepted as signatories under Appendix A of the MMoU or have expressed, via Appendix B, a commitment to seek legal authority to enable them to become signatories. In order to achieve these objectives, IOSCO has been providing resources to members, including technical assistance, so that the 2010 target could be met.

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