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US and UK Securities Regulators Discuss Cooperative Efforts

As part of an ongoing SEC-FSA Strategic Dialogue, SEC Chairman Mary Schapiro and UK Financial Services Authority (FSA) Chairman Adair Turner and Chief Executive Hector Sants met in London yesterday to discuss market conditions and regulatory matters affecting the US and the UK markets, as well as area in which the regulators may collaborate.  According to a release by the SEC, some of the areas of potential collaboration discussed during the meeting included:


    • Corporate governance and executive compensation


    • Disclosure regimes around client asset risk


    • Regulation of hedge funds and investment advisers and the protection of customer assets


    • Market infrastructure, particularly relating to central counterparties for OTC derivatives


    • Market supervision


    • Cooperation on cross-border supervision


Also according to the SEC release, the meeting:

also provided the opportunity for the SEC and the FSA to continue discussions in the areas of corporate governance, particularly board risk oversight, and executive compensation. Consistent with the emerging international consensus, both agencies' current efforts seek to address, among other things, the intrinsic links between the types and degree of risk a regulated entity/registrant assumes and their corporate governance and compensation policies.

Though neither regulator issues any concrete plans for collaboration or a timeline, given the ties between the US and UK markets, and the need to prevent "forum shopping" by market participants as the regulators of different nations review their market regulatory regimes, it is likely the two agencies will work more closely now than ever.  FSA Chief Executive Hector Sants said,

Global cooperation between regulators is central to tackling the reform agenda and the relationship between the FSA and the SEC is key for international markets. Our ongoing dialogue gives us the opportunity to widen the areas of cooperation between the FSA and the SEC, in particular progressing our collaborative work on hedge funds and credit rating agencies.

The full text of the SEC's release on the SEC-FSA Strategic Dialogue is available at: