SEC and Korea Financial Supervisory Commission Announce Terms of Reference for Regulatory Dialogue
FOR IMMEDIATE RELEASE
Washington, D.C., June 27, 2006 - The US Securities and Exchange Commission (SEC) and the Korea Financial Supervisory Commission (FSC) today announced terms for regulatory dialogue between the two agencies.
SEC Chairman Christopher Cox and FSC Chairman Yoon Jeung-Hyun elaborated the terms establishing the structure of and agenda for an SEC-FSC dialogue. This new dialogue has two main objectives:
- to improve cooperation and the exchange of information in cross-border securities enforcement matters; and
- to identify and discuss regulatory issues of common concern.
The dialogue will be composed of regular meetings and ad hoc information exchange at the staff level and between high-level representatives of the SEC and FSC, as well as the Korea Financial Supervisory Service (FSS), the implementing body of the FSC.
Given recent developments in both the US and Korean markets, the following topics have been identified for discussion for the Dialogue over the coming year:
- cross-border cooperation and information sharing on enforcement matters;
- accounting and auditing standards;
- corporate governance and internal controls; and
- approaches to regulated entities and market intermediaries.
The SEC and FSC agree that this is not an exclusive list of issues to be discussed in the dialogue and that the list may be revised as new regulatory issues affecting the Korean and US markets emerge in the course of the year.
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Terms of Reference for a Regulatory Dialogue between the US Securities and Exchange Commission and the Korea Financial Supervisory Commission
The purpose of this document is to set forth the terms of reference for a regulatory dialogue (Dialogue) between US Securities and Exchange Commission (SEC) and the Korea Financial Supervisory Commission (FSC). The SEC and the FSC aim to enhance cooperation and collaboration with a view to promoting investor protection, fostering market integrity, and promoting cross-border securities activities between Korea and the United States.
The Dialogue between the SEC and the FSC has two objectives:
- to identify and discuss regulatory issues of common concern; and
- to improve cooperation and the exchange of information in cross-border securities enforcement matters.
The FSC and SEC intend to identify specific areas of work under these objectives and to accomplish this work through regular contacts among senior staff and high-level officials of the SEC and the FSC.
The SEC and the FSC have agreed to the following in respect of the Dialogue.
Timing and Venue
It is expected that the Dialogue will be held as needed. The location of the Dialogue will alternate between Korea and the United States unless an alternative location is mutually agreed to by both authorities.
The SEC and the FSC will be represented at the Dialogue by senior staff and high-level officials of those agencies. The Financial Supervisory Service (FSS) of Korea, the implementation body that examines and supervises financial institutions in Korea under the direction of the FSC and in accordance with the relevant Korean laws, will also take part in the Dialogue.
The SEC and the FSC agree that from time to time it may be beneficial if other authorities from each jurisdiction were to participate in the Dialogue. Accordingly, the agencies will consult with one another to determine if a particular meeting of the Dialogue would be benefited by the participation of those authorities.
The agenda for the Dialogue will consist of topics pertaining to the objectives of the enhanced relationship between the SEC and the FSC, as described above and elaborated upon below. Prior to each scheduled meeting of the Dialogue, the SEC and the FSC will consult with one another and other relevant parties to identify specific issues that will be addressed at the upcoming meeting.
1. Identification and discussion of regulatory developments of common concern
In light of the growing interest in the cross-border flow of financial services and investment between the United States and Korea, the Dialogue will provide the opportunity for the SEC and FSC to better understand one another's regulatory regimes and to identify issues of mutual interest. The SEC and FSC will seek to gain a better understanding of the legal structures and regulatory requirements impacting financial services firms and companies. This will facilitate the ability of the SEC and the FSC to develop strategies for addressing issues of mutual concern in parallel and to discuss any potential spillover effects related to these developments at an early stage, as well as facilitate the development of compatible and high quality approaches to emerging regulatory issues. Such enhanced cooperation and collaboration between the SEC and the FSC will greatly advance the authorities' ability to achieve their shared goals of protecting investors and fostering market integrity in a global context.
2. Improving cooperation and the exchange of information in cross-border securities enforcement matters
The SEC and the FSC recognize that an increasingly important component of safeguarding domestic securities markets and protecting investors is the ability of securities regulators to both provide and receive assistance from their foreign counterparts in enforcement matters. Accordingly, the SEC and the FSC will work to inform each other quickly about matters that could assist one another in enforcing their respective securities laws and to provide timely and thorough assistance to one another, consistent with domestic laws. The FSC will continue to work to enhance its enforcement abilities so as to obtain the authority to provide information, documents and testimony that the SEC and other overseas securities regulators may need for enforcement matters. At the same time, the SEC will share its experiences and knowledge related to the investigation and prosecution of US securities violations, as well as international standards relating to the cooperation and exchange of information.