IOSCO’s Multilateral Memorandum of Understanding Concerning Consultation and Cooperation and the Exchange of Information – A Model for International Regulatory Convergence

Abstract

In 2002 the International Organization of Securities Commissions ('IOSCO’) formulated a Multilateral Memorandum of Understanding Concerning Consultation and Cooperation and the Exchange of Information (the MMoU’). This MMoU standardizes the process by which securities commissions who are members of IOSCO can obtain information from other member securities commissions for enforcement purposes. IOSCO has hailed this MMoU as one of its greatest achievements to date. It appears that IOSCO envisages that this MMoU will become a key weapon in the arsenal of securities commissions to tackle securities fraud which increasingly is no longer confined to jurisdictional boundaries. However the impact of this MMoU appears to be more significant than just a mechanism to exchange information. Because of the fact that the MMoU requires that countries have in place certain laws before becoming signatories to the MMoU, it appears to be operating as an instrument to facilitate the convergence of securities regulation. This article examines this MMoU in this context, its limitations and whether or not it can serve as a model for other areas where international regulatory convergence is sought.

Keywords: IOSCO, enforcement, global governance, securities regulation, securities regulators, IOSCO MMoU, memorandum of understanding, networks, regulatory convergence, soft law, network governance

JEL Classification: K33, K22, K42