The Financial Services Commission to Join IOSCO MMoU
2010/07/09 Leave a comment
The Financial Services Commission (FSC) and the Financial Supervisory Service (FSS) of Korea became signatories of IOSCO MMoU. IOSCO stands for International Organization of Securities omission, which is an international organization for preventing and protecting securities fraud and financial related crimes.
Started as an inter-America cooperative organization 1974, it transformed into a global agency in 1983. The organization focuses heavily on regulating securities and future market of the world, setting international standard for the markets, and currently regulates over 95% of securities market of the world. Korea has been a member of IOSCO since the early years of its foundation, being first participant as non-American country member along with United Kingdom. 182 agencies from over 100 countries now are members of IOSCO. Though Korea has long been a member of the IOSCO, it is only recent that request was made to sign MMoU. First request was in 2007, but the full membership was finally guaranteed this year after series of amendments had to be made for domestic securities laws to meet the global standard. The enactment of the financial and investment services and capital market act in 2009 has paved the way in signing MMoU.
The MMoU (Multilateral Memorandum of Understanding) which the FSC and the FSS joined is a standard of cross border cooperation needed when managing cross border securities and futures crimes. The MMoU started out as an initiative action of the U.S. after the September 11th incident in 2001 in order to enhance sharing information and cooperation regarding international securities related crimes. Countries experienced difficulties in investigating financial crimes especially when its trail crossed the jurisdictional borders. The MMoU enables its members to request cooperation with other members in dealing with financial crimes such as insider dealings, market manipulation, terrorist financing, manipulative practices, wrongful practices by investing advisors, brokers, and other market intermediaries. Although there has been bilateral agreements of the similar characters existed, the IOSCO’s MMoU is the first group based financial regulatory agreement.
By becoming the member of MMoU, the Korean FSC and the FSS can get assistance from other financial committees when a foreign entity or person commits financial crimes in Korea. One of the most significant beneficial aspects would be information sharing; the signatories can share information helpful in investigating crimes. Currently the members of the MMoU including Securities and Exchange Commission of the U.S (SEC), is 65. Moreover the requests made regarding sharing information in 2008 have increased by over 100% since 2004, reaching up to approximately 900 requests. Such level of participation shows how actively the members are cooperating in fighting financial crimes. By signing the MMoU, Korea certainly would have an edge in cross border crimes with more efficiency with resources.