2.  Cooperation and information exchange amongst financial supervisors and regulators are essential for effective oversight in an integrated financial system.  Weaknesses in cooperation and information exchange can undermine the efforts of regulatory and supervisory authorities to ensure: › that laws and regulations are followed › that the operations of the financial institutions, for which they have responsibility, are adequately supervised.

3.  Information sharing and cooperation among regional jurisdictions assists financial services regulation in many ways.  Information sharing and cooperation assists regulators when: › evaluating licensing applications, › performing the on-going supervisory and regulatory functions, and › carrying out enforcement action.

4.  Regional regulators should focus on the way in which cooperation among jurisdictions affects their own performance as regulators and that of fellow regulators.  Regulatory cooperation and information sharing is not about more or less regulation, but about achieving better regulatory outcomes.

5.  The increasing globalization of financial markets and activities mean: › That information relevant to approvals is often beyond the immediate jurisdictional reach of the competent regulator. › That threats to systemic stability are not confined to domestic factors and may include the behaviour of financial institutions in another jurisdiction.

6.  There are a number of challenges confronting regulators as they work to share their information with other regulators. These challenges range from political and managerial to technical and include: › Legislative Impediments › Lack of Sharing Mechanism or Enforcement Action from the Current Sharing Mechanism › Data/Information Systems › Protection of Sensitive Data and Information

7.  Legislative Impediments  Challenge relates to the lack of legal authority to share and access information from other jurisdictions.  Restrictions in legislation that limit a jurisdictions ability to share information with other regulators, locally, regional and internationally.  Domestic laws with in need to be amended to remove some of the impediments to cooperation and information sharing.

8.  Lack of Sharing Mechanism or Enforcement Action from the Current Sharing Mechanism  The MOU is the primary mechanism used to establish information sharing agreements.  The MOU has been criticized for a lack of enforceable actions which challenges the extent of sharing.  The effectiveness of an MOU largely depends on the “goodwill” of the parties signing the MOU.  Compliance with an MOU depends on the underlying legal authority of each party.

9.  Data/Information Systems  The information system may impede cooperation and information exchange among jurisdictions.  Different regulators maintain different and separate information systems and these different systems can significantly complicate routine information sharing.  Should distinguish between: › requests for information that is already in the hands of the requested authority, and › requests for which the requested authority itself needs to take steps to acquire information from other bodies or persons in its jurisdiction.

10.  Protection of Sensitive Data and Information  Regulators are concerned regarding the protection of sensitive data and information.  In particular, concerns about the need to balance inclinations to share and the need to protect different types of regulatory information with varying degree of sensitivity.

11.  In cooperation requests, the existence of a previous cooperative relationship with the requesting authority is helpful in ensuring an appropriate and timely response.  Consequently, most authorities spend considerable time and resources cultivating links bilaterally and through attendance at relevant regional and international meetings.

12.  Some of the organisations are: › the International Organisation of Securities Commissions, › the Council of Securities Regulators of the Americas › the Offshore Group of Collective Investment Scheme Supervisors › the Caribbean Group of Securities Regulators

13.  Principles for Cooperation in Regulation  13. The Regulator should have authority to share both public and non-public information with domestic and foreign counterparts.  14. Regulators should establish information sharing mechanisms that set out when and how they will share both public and non-public information with their domestic and foreign counterparts.  15. The regulatory system should allow for assistance to be provided to foreign Regulators who need to make inquiries in the discharge of their functions and exercise of their powers.

14.  Principle 13. The Regulator should have authority to share both public and non-public information with domestic and foreign counterparts.  Addresses the power of the regulator(s) to share public and non-public information within its files, or available to it through inspection and investigation, without other external process.  When sharing non-public information, care must be taken by the requested regulatory authority to ensure that the use of such information is consistent with the purpose for which it is shared and to preserve its confidentiality subject to such uses.

15.  Principle 14. Regulators should establish information sharing mechanisms that set out when and how they will share both public and non-public information with their domestic and foreign counterparts.  Securities regulators have long used MOUs to facilitate consultation, cooperation and the exchange of information in securities enforcement matters.  Most of these MoUs have been entered into on a bilateral basis; since 2005 the IOSCO MMoU has become the mandatory global minimum standard for enforcement cooperation among securities regulators.

16.  Principle 15. The regulatory system should allow for assistance to be provided to foreign Regulators who need to make inquiries in the discharge of their functions and exercise of their powers.  Effective regulation and supervision can be compromised when necessary information is located in another jurisdiction and is not available or accessible.  A regulator should be empowered to assist and provide information necessary to foreign regulators in the discharge of their mandate and mission.

17. Mrs Cyralene Benskin-Murray Financial Services Commission # 34 Warrens Industrial Park Warrens, St. Michael Barbados, W.I. Tel: (246) 421-2142 Fax: (246)421-2146 Email: cbenskin-murray@fsc.gov.bbcbenskin-murray@fsc.gov.bb