Securities and Futures Markets:

Cross-Border Information Sharing Is Improving, but Obstacles Remain

GGD-92-110: Published: Jul 28, 1992. Publicly Released: Jul 28, 1992.

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Pursuant to a congressional request, GAO provided information on U.S. oversight of international market activity, focusing on: (1) the types of information various nations' securities and futures regulators need in order to share and meet market oversight responsibilities; (2) the extent to which information is currently shared; (3) the types and effectiveness of arrangements used for sharing information; (4) impediments and solutions to sharing information; and (5) the effectiveness of existing international organizations in addressing issues related to international information sharing.

GAO found that: (1) the United States has made significant progress in improving access to foreign-based information; (2) federal regulators have entered into 23 information-sharing agreements, and U.S. exchanges have 40 information-sharing agreements with foreign regulators and exchanges; (3) unilateral legislation allows both U.S. and foreign legislative authorities to compel information otherwise unavailable to U.S. and foreign regulators; (4) existing legal structures such as blocking and bank secrecy laws prohibit disclosure of certain information; (5) existing regulatory structures, a lack of a central regulator to exchange information or negotiate agreements, differing technical and resource capabilities, the inability to obtain information from countries with ongoing criminal proceedings, and laws requiring violations to be bilateral offenses before information can be shared, hinder futures and securities information sharing; and (6) the Commodity Futures Trading Commission (CFTC) lacks the Securities and Exchange Commission's (SEC) legislative authority for sharing information, conducting investigations on behalf on foreign counterparts, or exemptions from disclosure requirements under the U.S. Freedom of Information Act, making information sharing more difficult.

Matters for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: Legislation was passed in October 1992.

    Matter: Congress should provide CFTC the same legislative authority SEC already has to obtain information on behalf of foreign regulators in order to answer those regulators' requests, without regard to whether the requests raise possible violations of U.S. laws.

  2. Status: Closed - Implemented

    Comments: Legislation was passed in October 1992.

    Matter: Congress should provide CFTC the same legislative authority SEC already has to guarantee more fully the confidentiality of information provided to it by foreign regulators.

  3. Status: Closed - Implemented

    Comments: Legislation was passed in October 1992.

    Matter: Congress should provide CFTC the same legislative authority SEC already has to pass non-public information directly to foreign self-regulatory organizations.

 

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