The US Securities and Exchange Commission (SEC) has signed an enhanced memorandum of understanding concerning consultation and cooperation and the exchange of information with the US Commodity Futures Trading Commission (CFTC).
This agreement was made at the 44th annual international organisation of securities commissions (IOSCO). The body initially enforced the multilateral memorandum of understanding concerning consultation and cooperation and exchange of information in 2002 (2002 MMoU).
Outlined in the 2002 MMoU was a framework for international information-sharing among securities and derivatives regulators to support cross-border enforcement investigations. This is now seen as the international benchmark for cross-border cooperation in enforcement matters.
The 2002 MMoU has 123 signatories agreeing to comply with minimum standards for obtaining and sharing with fellow signatories banking, brokerage and beneficial ownership information. Both the SEC and CFTC signed this back in 2002.
Due to the change and evolution of the global financial market, including the deeper use of technology, the IOSCO has made changes to the original 2002 MMoU. The enhanced MMoU (EMMoU) will get signatories to agree to new forms of assistance critical to effective enforcement, such as getting compelled testimony and obtaining asset freezes to protect customer funds, among others.
SEC chairman Jay Clayton said, “As investment products, services and markets evolve, it is critical that the international community of securities and derivatives regulators continue to cooperate to protect investors from bad actors perpetrating fraud across borders.
“The SEC took an active role in negotiating and drafting the EMMoU with the intent of building upon the tremendous success of the MMoU in facilitating international cooperation. This signing demonstrates the SEC’s continued strong commitment to combatting securities and derivatives fraud against American investors – including fraud which is carried out outside our borders.”
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