FSA and FINRA sign cooperation agreement for global securities regulation
The largest independent regulator of securities firms in the U.S., the U.S. Financial Industry Regulatory Authority, and a financial services and markets regulator in the UK, the Financial Services Authority, entered in a Memorandum of Understanding (MOU) to enhance cooperation between the two firms. The MOU establishes guidelines for information exchange between the FSA and FINRA when dealing with the firms and individuals under common supervision and supports collaboration on investigations and enforcement matters. The agreement also allows further sharing of regulatory techniques, including approaches to risk-based supervision. "To ensure consumer protection and market integrity in today's global market, regulators must work together with key regulatory partners," said Richard Ketchum, CEO and chairman of FINRA. "Under this agreement, the FSA and FINRA will be able to share information more freely and expediously in support of the oversight of common firms and investigations into wrongdoing." The MOU, available for download here, does not modify or supersede any laws or regulatory requirements in force in the U.S. or the UK. There is a strict confidentiality agreement written in the document, stating that neither authority can use, publish or disclose non-public information they receive without prior approval from the requested authority. However, if there is a legally enforceable demand for private information, the firm receiving the demand should notify the disclosing authority and receive its consent before actually receiving the information. This provision will stay in existence after the termination of the MOU. "Given the linkages between our markets, it is vital that both regulators cooperate closely with each other," said Jon Pain, managing director of supervision at the FSA. "This MOU will enhance the supervision of firms and financial markets in both the UK and the U.S." The memorandum took effect on Sept. 15, when both FINRA and the FSA signed the agreement, and will last until 30 days after one files to terminate it. Write to Christine Ricciardi.