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U.S. Securities and Exchange Commission

SEC Chairman, FSA Leadership Meet on Interactive Disclosure, Continuity, Hedge Funds, and Exchange Regulations


Washington, D.C., June 2, 2006 - Securities and Exchange Commission Chairman Christopher Cox, UK Financial Services Authority Chairman Callum McCarthy, and FSA Chief Executive Officer John Tiner and relevant senior staff met on Friday to discuss the regulatory aspects of increased capital flow between their nations.

The agenda included the implications of potential cross-border exchange mergers and other common areas of regulatory interest. The meeting also identified areas for future collaboration, and the participants agreed to a follow-up meeting in London toward the end of 2006.

"These in-depth discussions between the securities regulators in the United States of America and the United Kingdom will help prepare us for potentially significant changes in our capital markets on both sides of the Atlantic," said SEC Chairman Christopher Cox. "Our increasingly global markets demand increased cooperation among national regulators in order to promote high standards and strong investor protection. I am particularly pleased with the progress we've made in exploring critical issues with the FSA, given the growing interconnection and interdependence of our capital markets."

"I am delighted to have had workman-like and productive discussions. Regulators around the world need to recognize the increasing international nature of financial institutions and respond to them. Our work with the SEC is designed to do this," said FSA Chairman Callum McCarthy.

FSA CEO John Tiner added, "Today's discussion focused on the regulation of trading platforms and the related infrastructure, and of hedge funds. These are clearly areas of high priority for regulation, and today we made good progress in developing a shared understanding of the issues and how to approach them."

The meeting, which followed the signing of a Memorandum of Understanding on Regulatory and Supervisory Cooperation between the two organizations in March, did not focus on specific transactions. Areas covered included:

  • Interactive data reporting. The leaders discussed how to improve the use of technology in enhancing transparency, simplifying investor disclosure and making regulation more efficient and effective. They agreed to identify incentives for market participants to use interactive data and to designate staff from both agencies to coordinate implementation.
  • Crisis management. The U.S. and UK agreed on the need to keep open channels of communication and collaboration to respond readily and effectively to a financial crisis. To this end, the SEC and FSA will conduct a desk-top crisis response exercise designed to complement similar, more broad-based, international efforts.
  • Hedge funds. There was a wide-ranging discussion of the activities of hedge fund advisers, their relationships with other financial entities, and regulation by U.S. and UK authorities. Valuable progress has already been made in reducing duplication in reporting requirements placed on fund managers that are subject to regulation by both authorities. Both organizations agreed to exchange more information on the activities of hedge fund advisers and to collaborate in related areas of regulatory concern.
  • Exchanges. The agencies also considered increasing collaboration to address proposed and potential trans-national ownership of exchanges. The SEC and FSA agreed to continue discussion on the protection of investors and facilitation of capital formation in light of and irrespective of the outcome of current cross-border proposals.

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Modified: 06/02/2006