International: Transatlantic Issues
Last Updated: August 14, 2008
Overview
The United States and the European Union financial services sector has greatly benefitted from the informal transatlantic Financial Markets Regulatory Dialogue (FMRD). The FMRD has developed over time to allow U.S. and EU regulators to discuss proposed regulations on a prospective basis to help minimize regulatory differences and to foster a growing transatlantic businesses environment. SIFMA members have identified a number of issues where the FMRD can further progress in developing a transatlantic capital market for the benefit of investors and consumers of financial products and services.
Position:
SIFMA fully supports the Transatlantic Economic Council’s goal to strengthen transatlantic economic integration through inter alia regulatory modernization that would eliminate transatlantic barriers to investment and financial markets. SIFMA believes the fostering of economic integration by streamlining the disparate regulatory frameworks within which the transatlantic capital markets and investment regimes operate will: 1) facilitate financial services operations; 2) expand investor choice; 3) strengthen investor protection; 4) improve regulatory cooperation and 5) enhance liquidity and investment.
The U.S. and E.U. should provide exemptions from local licensing requirements to U.S. and E.U. firms which only transact business on a cross-border basis with sophisticated investors. We urge efforts to modernize SEC rule 15a-6 as a practical first step. This would not require resolution in its early phases of the full panoply of issues raised by "mutual recognition." In addition to exemptive relief, we believe further progress can be made in modernizing the transatlantic regulatory structure through: a) wider acceptance of regulatory recognition (whether unilateral, bilateral or multilateral) as accepted international regulatory policy based on a common set of regulatory values and shared outputs; and b) identifying and promoting "targeted" rules’ standardization where only standardization can deliver tangible benefits for the providers and consumers of financial services (eg, classification of counterparties, disclosure of large shareholdings; reporting standards).
Status:
The first meeting of the Transatlantic Economic Council was held November 9, 2007 in Washington D.C. The next meeting will be held in June 2008.
