Renewed Tie Between Financial Regulation Agencies Enhances Cooperation, Collaboration

Jack Humphrey, Regulatory journalist
July 25, 2011 /

The Securities and Exchange Commission and the Capital Markets Board of Turkey (CMB) have renewed their relationship to enhance cooperation and collaboration aiming to promote investor protection, foster market integrity, and facilitate cross-border securities activities between Turkey and the United States.

With the dialogue, both financial regulation agencies can now discuss issues of common concern, including those relating to supervisory and enforcement matters in light of the growing interest in the cross-border flow of financial services and investment between the U.S. and Turkey.

On the other hand, the SEC issued on July 20 an investor bulletin highlighting the most significant risks that foreign currency exchange transactions may pose for individual investors.

The SEC-CMB dialogue embraces three objectives, namely to identify and discuss regulatory issues of common concern, improve cooperation and the exchange of information in cross-border securities enforcement matters, and maintain and continue to develop the existing jointly-sponsored training and technical assistance programs that benefit the SEC, CMB, and other regulators in the region.

These terms that are said to establish the structure of and agenda for the dialogue have been elaborated on by SEC Chairman Mary Schapiro and CMB Chairman Vedat.

In a statement, Schapiro said: “Participating in cross-border efforts to increase transparency for investors, promote well-regulated markets, and strengthen cooperation in supervisory and enforcement matters is essential for any securities regulator in today’s global markets.”

According to Schapiro, the dialogue between the financial regulation agencies will serve to benefit investors in the United States and Turkey, and facilitate cross-border capital flows.

Akgiray added: “With the new dynamics caused by global financial markets, we would like to capitalize on this international dimension to the benefit our fast-growing capital market in Turkey.”

Akgiray said the bilateral regulatory dialogue that gives rise to the cooperation between the financial regulation agencies “will significantly improve cooperation for regulatory and supervisory issues, address common concerns more effectively, and therefore prove to be mutually beneficial.”

“Upgrading our financial markets in an internationally collaborative way will contribute to the Istanbul Financial Center workplan as well. We believe this initiative will facilitate the CMB’s mission of investor protection, market integrity, and a regulatory environment that encourages capital formation.”

Ethiopis Tafara, Director of the SEC’s Office of International Affairs, said” “We benefit immensely in obtaining the CMB’s perspectives on current challenges that securities regulators face given CMB’s unique location within the region.

“We look forward to discussions on a variety of matters of importance to investors in the global marketplace, including improving oversight of market intermediaries and the development of markets for small enterprises.”

This announcement marks the long-standing tradition of bilateral technical assistance programs between the SEC and CMB.

In 2008, 2009, and 2010, the CMB co-sponsored three major regional training sessions in Turkey on market regulation, inspections, enforcement, and disclosure. More than 575 people were trained, including financial services staff and officials from the Turkish market as well as other foreign authorities from the region.

At these programs, the SEC and CMB senior staff shared their insights on promoting timely and accurate disclosure and transparency as a tool for regulating capital markets.

The CMB has succeeded in attracting participation in these market-development training programs due to its current role as head of IOSCO’s Emerging Market Committee.


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