SEC's Cox urges global regulators to cooperate more

By Emily Chasan

NEW YORK, Nov 18 (Reuters) - International market regulators should enhance their level of cooperation, but should not outright merge into a single global regulator, the chairman of the U.S. Securities and Exchange Commission said on Tuesday.

In the recent financial crisis, regulators have worked together frequently, and could increase information sharing, SEC Chairman Christopher Cox said.

"We've seen that there are no longer any economic islands," Cox said in remarks to a Financial Executives International conference in New York. "... Markets in Bangkok are being affected by investment decisions made in Boise."

In the past year the SEC has made 556 requests of foreign regulators for assistance with SEC enforcement investigations, and in turn foreign regulators have made 454 requests from the SEC, Cox said.

"All of these cooperative efforts have led to tangible ... results," Cox said.

In May 2002, the International Organization of Securities Commissions (IOSCO) adopted a multilateral memorandum of understanding to address consultation, cooperation and information exchanges between regulators in different countries. But Cox said on Tuesday there was a need for a "new kind of agreement for more broad assistance."

Cox said regulators should extend agreements to share telephone and internet service provider records, confidential exchanges of credit card records, travel information, employment records, accounting information -- including audit work papers -- and even testimony and responses to questions from enforcement targets.

In August, the SEC signed such an enhanced memorandum of understanding with the Australian Securities and Investment Commission.

"We hope that this enhanced level of enforcement cooperation will serve as a model for other jurisdictions and possibly set a new international standard for enforcement cooperation," Cox said.

COOPERATION WITH LIMITS

But while international accounting standards could grow into one single system, cooperation among securities regulators should be different because national regulators have unique priorities, Cox said.

There is a value to close international coordination among regulators, but it would be inadvisable for IOSCO to become an all-out global securities regulator, Cox said.

"Securities regulations can and should be converged to a far higher degree than we have already successfully attained," Cox said. "But it's unrealistic to think we could or should make regulations identical from country to country because of differences in national laws, economic conditions and objectives. These differences are healthy and they're normal."

Cox said international coordination is different from international regulation. For example, an international regulator could end up regulating to the lowest common denominator, and higher standards in some countries could be compromised, he said.

"The Securities and Exchange Commission is responsible for the protection of American investors and it will never compromise that mission nor should any other international regulator," Cox said.

"Global consultative bodies should not aspire to become global regulators."

Cox has indicated he will resign as head of the U.S. securities regulator early next year, when the U.S. presidential administration changes.

(Reporting by Emily Chasan)