Caribbean Group of Securities Regulators 10 th Annual Conference and Workshop A Practical Look at Overcoming the Challenges to Achieve Signatory Status to IOSCO’s MMoU Candice Huggins Director, Legal Advisory and Enforcement Trinidad and Tobago Securities and Exchange Commission

CGSR Membership:  Members: 11 CGSR MMOU Signatories:  British Virgin Islands: April 2007  Bermuda: June 2007  Cayman Islands: March 2009  Bahamas: January 2013  Trinidad and Tobago: June 2013 IOSCO MMOU: The CGSR Perspective

Status of other CGSR Members in the Application Process

 Essentially 16 principles representing an understanding amongst its signatories about how they will;  Consult  Cooperate, and  Exchange information for securities regulatory and enforcement purposes IOSCO MMOU: Que es?

 Enhancing jurisdictions’ ability and willingness to cooperate internationally  Enhancing compliance with and enforcement of securities laws and regulations  Enhancing the ability of securities regulators to detect and deter cross border financial crime IOSCO MMOU: Objectives

 Elite Status for Securities Regulators  International Benchmark/Gold Standard for cross- border cooperation  Effective enforcement tool  Entry into a ‘stand out’ Group of Regulators with ability to interact seamlessly  Enhanced reputation and credibility of the capital market  Likelihood of attracting increased capital flows and of experiencing a lowering in the cost capital Benefits of being an MMoU Signatory

 Ability to obtain key investigative information from overseas regulators, hence more effective enforcement  Use of the MMOU by other international organisations (IMF, WB, FATF) when conducting compliance assessments.  Not being a signatory can lead to reputational issues and international isolation, including a perception of a lack of transparency---particularly as the number of MMOU signatories increases and jurisdictions who remain on the Appendix B form an ever smaller number  The G20 and FSB consider signatory status of MMOU in assessing the jurisdiction’s implementation of international standards Benefits of being an MMOU Signatory (cont’d)

 Statement  Submission of Questionnaire and supporting documentation to Secretary General  Screening Group review  Verification Team  Decision making Committee Becoming Signatory: The Application Process

 Ability to obtain Information  Ability to take Statements  Ability to share Information  Powers of the Applicant  Independent Interest  Records Maintenance  Secrecy of Blocking Laws  Permissible Uses of the Information  Confidentiality  Accessing information through other Governmental bodies Issues for Consideration: The Application Process

IOSCO has identified five (5) most common obstacles as: 1.Inability to access banking records 2.Inability to obtain information on beneficial owners 3.Inability to investigate if no domestic law has been violated (dual criminality principle) 4.Inability to use the information in criminal proceedings 5.Inability to preserve confidentiality of information Main Obstacles to becoming signatory

 Political:  Will/Commitment reflected in Legislative Agenda (IOSCO requires an expression of a formal commitment of the Regulator to seek the necessary legal authority to achieve MMOU signatory status)  Legislative:  Major and most difficult hurdle (IOSCO’s non-acceptance of Assurances, Guidelines or Agreements as EVIDENCE of Regulator’s ability to implement MMOU principles  Demonstrating effective compliance with MMOU principles (the verification process)  Market:  Responsiveness/readiness/reaction of Registrants and Market Actors to the proposed development (Evidenced feedback from influential Industry Associations, lobbyists, interest groups) Challenges of becoming Signatory to MMOU

2009  TTSEC applies to become a signatory  Placed on Appendix B  4 Deficiency Areas Identified  Inability to access bank records  Inability to investigate if no domestic law has been violated (dual criminality principle)  Inability to preserve confidentiality of information  Record retention period too short Becoming a MMoU Signatory: The TTSEC Experience

2010  Securities Bill allowed to lapse in Parliament due to deficiency areas identified in 2009 report  Consultant re-engaged to revise draft legislation to address deficiency areas Becoming a MMoU Signatory: The TTSEC Experience

2011  Revised draft reviewed by a cross functional team of TTSEC staff  Final draft submitted to a government appointed technical committee for review and approval  Ministry of Finance – Chair  Central Bank  TTSEC Becoming a MMoU Signatory: The TTSEC Experience

2012  Public consultations  Written Comments  Market Groups  Regulators  Legal Fraternity  General Public Parliament  House of representatives  Joint Select Committee  Senate

Penholder – Assistance with updating previous application Verification Team – Tennis match of questions based on information provided in application Screening Group – Application considered at May 2013 meeting of Screening Group – additional questions based on application Signatory Status Reapplication Process: The TTSEC Experience

Political Will Stakeholder Buy-In  Resistance re access to bank records  Investigations where no local law is violated Resources for legislative review Ability to provide clear and prompt answers to penholder, verification team and screening group  Need for clear legislative authority with answers Critical Factors : The TTSEC Experience

Circle of Trust Consequences of not being Signatory MMoU Signatories Non Signatory

 Listing: 2013 List of MMoU Non- Signatory Members:  Viewed as an incentive for members and a persuasion tool for Governments  Consists of 5 questions which objectively describe the currents state of play of each non – signatory’s application  2013 MMoU Resolution: Non Signatories subject to Measures emanating therefrom:  Reduced cooperation from Appendix A signatories  Restriction from nominating candidates for election or appointments to leadership positions  Stepping down from leadership positions  Suspension of participation in IOSCO Policy Committee  Suspension of voting rights Consequences of not being Signatory

 Table showing summary….. Summary of Approved Additional Measures

Not just Enabling Legislation but:  Handbooks and Reference Guides: IOSCO Screening Group not experts on applicant’s legislation so the more explanatory and supporting information that can be provided the better for example the British Virgin Islands Handbook explaining the Legislative Gateways allowing for International Cooperation.  Explanatory Statements: Example of Cayman Islands Monetary Authority’s “ Statement Regarding Access to Financial Information by Financial Sector Regulators and Law Enforcement. Explanation of the Gateways within Confidentiality Laws which allow for cooperation and exchange of information  Demonstrable history of International Cooperation :  MLATs  TIEAs Practical Examples of enhancing a jurisdiction’s Profile

 Implementation  Self Assessment  IOSCO Monitoring Group Post Signatory Status

Thank You Questions????