Enforcement cooperation: A new age dawns
US Securities and Exchange Commission chairman Christopher Cox recently observed at an international regulatory meeting in London that "financial transactions are crossing national boundaries faster than ever before," and that "the world's exchanges are now beginning to combine their operations in order to more closely integrate the world's capital markets". Cox concluded that national regulators "have no choice but to cooperate".
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Why international enforcement is becoming more similar to the SEC's model in the US
European securities regulators are responding to this environment by bulking up their enforcement muscle and bringing large enforcement cases that increasingly have the look and feel of the SEC's cases in the US markets. In the last few years, Europe has created new and far more potent securities regulatory bodies that are beginning to make their presence felt. And EU member states are implementing EU directives to achieve genuine cross-border convergence in securities regulation.
We can expect to see an ever-increasing number of cross-border enforcement investigations involving two or more national regulators, one of which will often be the SEC. As such cross-border investigations proliferate in Europe, the involvement of the traditionally aggressive SEC will influence the continuing evolution of securities enforcement in Europe, and recent developments suggest that the balance will be struck closer to the US enforcement model. As this happens, Europeans might consider responding to European investigations with approaches more often used in SEC matters, while remaining sensitive to local practices and customs.