| NEW YORK
NEW YORK Nov 18 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
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
"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
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
Cox has indicated he will resign as head of the U.S.
securities regulator early next year, when the U.S. presidential
(Reporting by Emily Chasan)