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European, U.S. Regulators Outline Collaboration Plans

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AMSTERDAM, Netherlands (–In a nod to growing interrelationships between global securities markets, officials at the U.S. Securities and Exchange Commission and the Committee of European Securities Regulators said June 4 that they would work more closely together.

In a joint announcement, SEC Commissioner Roel C. Campos and CESR Chairman Docters van Leeuwen said the “enhanced dialogue” between the two regulatory bodies had two primary objectives: to identify emerging risks in U.S. and European securities markets so as to more quickly address potential regulatory problems, and to share information about potential regulation in an effort to find commonalities and possibly draft compatible regulations.

“In today’s markets, it is critical that securities regulators around the world work with each other in order to address the risks facing our markets,” Mr. Campos said in a statement. “By discussing emerging problems at an early stage and working to facilitate convergence of regulatory approaches, the SEC and CESR will be able to protect investors while lowering unnecessary administrative barriers to cross-border business.”

The idea for greater collaboration came after Mr. van Leeuwen visited Washington at the end of 2003. SEC Chairman William H. Donaldson first broached the subject of increased dialogue when he visited officials from the Paris-based CESR at a meeting in Brussels, Belgium, in January.

On a practical level, the work will involve officials from both regulatory agencies speaking several times per year. These discussions will involve the chairmen of the organizations, as well as other employees. For the rest of this year and early 2005, Messrs. Campos and van Leeuwen outlined several areas for discussion.

The list includes: the SEC’s review of U.S. national market structure and the CESR’s work on implementation of a new European Investment Services Directive; future mutual fund regulation, specifically as it relates to stale price arbitrage, late trading and corporate governance; and supporting International Financial Reporting Standards.

“Ensuring the integrity of the markets is a common objective which both binds and drives the work of the SEC and the CESR on a day-to-day basis, encouraging us to forge this deeper dialogue,” Mr. van Leeuwen said in a statement.

Mr. van Leeuwen also said news of the increased dialogue should not be met with short-term questions of whether or not the effort was worthwhile. Rather, he said, it should be judged on the long-term results.

“Our dialogue will need to be responsive to the needs and developments of the markets we share,” he said. “The question will therefore not be whether we labored hard enough, nor even if the result was worth the effort, but if the results create quality in a globally integrated market.”

Added Mr. Campos: “The enhanced relationship ?? 1/2 builds upon the strong ties that already exist between the U.S. and Europe, and will help bring the global community of securities regulators even closer together.”

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Contact Robert F. Keane with questions or comments at:

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