U.S. Training Helps Fight Global Securities Fraud

By Jaroslaw Anders
USINFO Staff Writer

Washington - Securities regulators from nearly 70 countries will come to Washington April 17 to take part in the two-week annual International Institute for Securities Market Development program organized by the U.S. Securities and Exchange Commission (SEC).

“In the globalized economy there is a great need for cooperation between regulators around the globe. We need the cooperation of sophisticated, well-trained counterparts in other jurisdictions,” Robert M. Fisher, assistant director in the SEC Office of International Affairs told USINFO.

The SEC is the U.S. regulatory agency mandated to protect investors, maintain fair, orderly and efficient markets, and facilitate capital formation.

Now in its 16th year, the institute is the SEC’s main global training program bringing together senior securities regulators from emerging or recently emerged market economies for a series of lectures, panels and workshops on the development, operation and regulation of securities markets.

After the training, participants have a chance to gain hands-on experience while visiting with U.S. stock exchanges, investment firms and nongovernmental self-regulatory organizations.

Later in 2007, delegates from developed markets will meet in Washington at a one-week Institute for Securities Enforcement and Market Oversight program. That program focuses on practical techniques for conducting investigations, market surveillance and auditor oversight.

Both institutes are part of a range of international training run by the SEC throughout the world in cooperation with the U.S. Agency for International Development (USAID), international financial institutions and nongovernmental organizations. In 2006, SEC provided training for more than 1,000 officials from 107 countries.

SEC training is helping countries build their own regulatory systems and protect investors in an increasingly borderless investment environment, according to the SEC official. Apart from sharing best practices and globally applicable standards, the program builds mutual trust and understanding needed in large enforcement operations, he told USINFO.

“We are building strong relationships and making good friends around the world, Fisher said.

He added that in today’s global economy it is common that crucial evidence of securities crimes committed in the United States is found abroad. Foreign regulators “often request our help and we often request their help.” This cooperation has resulted in hundreds of successful transborder investigations, the official said.

The United States does not try to impose its own regulatory solutions on other countries, the SEC official said.  However, foreign regulators might find aspects of the U.S. model useful and implement them in their jurisdictions.

“To the extent that regulators around the world are sharing ideas and approaches to various challenges with one another, there is more likely to be long-term convergence in regulation, and that tends to reduce cost for investors, issuers and everybody in the market,” Ethiopis Tafara, director of the SEC Office of International Affairs told USINFO.

The SEC international training program was initiated primarily to train securities regulators from former communist countries in Eastern Europe. Since then, it has branched out to offer training to regulators in practically every region of the world. SEC regulators work with their counterparts in South and East Asia, the Middle East, Africa, Latin America and the Caribbean. (See related article.)

In 2006, the SEC conducted training programs in a number of oversees locations including China, India, Malaysia, the Philippines, Thailand, Vietnam, Ecuador, Peru, Trinidad and Tobago, Bahrain, Saudi Arabia, Kuwait and Iraq.

The faculty of the SEC courses includes senior SEC officials as well as representatives of other U.S. government agencies, self-regulatory organizations and representatives of major U.S. securities companies.

SEC representatives say their agency is positioned uniquely to share the agency's expertise with international partners. The commission officers deal every day with cases of insider trading, market manipulation, market surveillance, financial disclosure and other aspects of modern securities markets. They are willing to share their collective knowledge with their counterparts abroad, they say.