Comments Received in Relation to the Consultation Report on Multi-jurisdictional Information Sharing for Market Oversight

COMMENTS RECEIVED IN RELATION TO THE CONSULTATION REPORT ON Multi-jurisdictional Information Sharing for Market Oversight TECHNICAL COMMITTEE OF THE INTERNATIONAL ORGANIZATION OF SECURITIES COMMISSIONS APRIL 2007 1 Contents: Market regulation services inc. ........................................................................................... 2 International Capital Market Association (ICMA) ............................................................. 2 Swiss Exchange ..................................................................................................................4 Amman Stock Exchange..................................................................................................... 5 BOVESPA .......................................................................................................................... 5 Cairo and Alexandria Stock Exchanges.............................................................................. 6 British Bankers ́ Association .............................................................................................. 7 2 Market regulation services inc. Dear Ms. Kunz and Mr. Ochsner, On behalf of Market Regulation Services Inc. ("RS"), I am pleased to provide our comments on the draft report on Multi-Jurisdictional Information Sharing for Market Oversight. The attached version of the draft report contains our detailed comments. We also have two more general comments: 1. Initially, the model that is described is one in which a market in one jurisdiction (the Home Market) provides access to participants from another jurisdiction (i.e., individuals or firms that are broker-dealers or investors), but the report then addresses a model in which the Home Market provides access to a foreign market (as opposed to foreign broker-dealers or investors). As a result, the list is very different that it would be if regulators were sharing information relating to individual and firms across boundaries, as opposed to markets sharing information. We believe the former model (access by broker-dealers and investors) is also relevant, and question why it was not considered. The informational issues would obviously be quite different under the two models. 2. The report could also mention the Intermarket Surveillance Group ("ISG") as a venue for multi-jurisdictional information sharing among market regulators (at least among ISG members). Most of the information described in the report is covered under the agreement among ISG members, except for the business arrangements surrounding systems and continuity issues. We would be pleased to discuss these comments with you further. Doug Harris Director of Policy, Research and Strategy Market Policy and General Counsel's Office Market Regulation Services Inc. International Capital Market Association (ICMA) Thank you for the opportunity to comment on the draft paper which Standing Committee 2 will be seeking to finalise at its January 2007 meeting. 3 Overall we believe that the paper sets out a comprehensive list of the information which regulators might wish to share on a regular or ad hoc basis in order to properly discharge their responsibilities regarding (i) investment firms in their jurisdictions which are remote members of exchanges in other jurisdictions and (ii) listings and trading of securities or derivatives and associated securities and derivatives in multiple jurisdictions. Below we have set out a small number of comments on the paper which you might like to take into consideration. Although the paper makes no recommendations as to ‘specific operational arrangements’ for the reasons set out in the paper and with which we agree, the second recommendation concerning ‘requesting authorities’ calls for the authority to seek ‘to the degree possible, to obtain necessary information on its own’ and to avoid over-burdening the requested authority. In the context of the first sentence of the recommendation, that information requests should be reasonable, that proposition is sensible and pragmatic. However, to the extent that the information sought is not in the public domain it raises the issue of how, and from whom the information should be requested. If it is to be obtained from the local investment firm which is a remote member of the foreign exchange, the information is in the possession of the local firm, and the requesting authority has the power to obtain the information, that is unexceptionable. If however the proposition is that the requesting authority should approach the foreign exchange directly, other issues become relevant, notably whether the exchange has the right to respond under its local laws, and whether it has immunity from suit by interested parties if it provides such information. In short, it should be recognised that at a mini