The U.S. Commodity Futures Trading Commission (CFTC) announced yesterday that CFTC Chairman Tim Massad and Australian Prudential Regulation Authority (APRA) Chairman Wayne Byres have signed a Memorandum of Understanding (MOU) regarding cooperation and the exchange of information in the supervision and oversight of regulated firms that operate on a cross-border basis in the United States and in Australia.
Through the MOU, the CFTC and APRA express their willingness to cooperate in the interest of fulfilling their respective regulatory mandates. The scope of the MOU includes swap dealers and major swap participants.
The MOU covers aspects which are important factors regarding international regulatory collaboration, including event-triggered notification whereby each regulatory authority will endeavor to inform the other regulatory authority promptly, and where practicable in advance, of pending regulatory changes that may have a significant impact on the operations, activities, or reputation of a covered firm, including those that may affect the rules or procedures of a covered firm, as well as any material event of which the regulatory authority is aware that could adversely impact the financial or operational stability of a covered firm.
Such events include the failure of a covered firm to satisfy any of its requirements for continued registration or incorporation where that failure could have a material adverse effect in the jurisdiction of the other Authority, as well as any known adverse material change in the ownership, operating environment, operations, financial resources, management, or systems and controls of a covered firm and enforcement actions or sanctions or significant regulatory actions, including the revocation, suspension, or modification of registration or incorporation, concerning a Covered Firm.
Information sharing on request will be part of the agreement between the Australian and US regulators to the extent appropriate to supplement consultations, upon written request, the requested authority intends to provide the requesting authority with the fullest possible cooperation subject to the terms in this MOU in assisting the requesting authority’s supervision and oversight of covered firms, including assistance in obtaining and interpreting information that is relevant to ensuring compliance with the Laws and Regulations of the Requesting Authority and that is not otherwise available to the Requesting Authority.
Examples of such information which would be shared upon request include aspects relatng to financial resources, risk management, and internal control procedures.
For the official announcement from the CFTC, click here.