Financial institutions hit with double whammy
Financial institutions could expect heightened multi-jurisdictional scrutiny from regulators around the world as they try to protect their own markets, according to a law firm.
In a new guide to be unveiled in Australia this week, Herbert Smith Freehills, said regulators were requesting their overseas equivalents to assist in their investigations post the global financial crisis, amdist tighter regulations.
Sydney-based partner, Luke Hastings, said the Australian Securities and Investments Commission (ASIC) and the Australian Prudential Regulation Authority (APRA) had entered into several memoranda of understanding with regulators.
"In this context, it's clear that ASIC is regularly engaging with its overseas counterparts, with 362 international cooperation requests made in 2013-14, and 448 requests received," Hastings said.
The law firm's London-based financial services and regulations partner, Andrew Procter, said regulators that received requests from overseas regulators had the power to investigate, acquire documents and information from financial institutions and order them to attend interviews and answer questions.
"This is resulting in financial institutions facing the possibility of being investigated, and potentially sanctioned, in several jurisdictions at the same time, for the same alleged conduct," Procter said.
Regulators were usually keen to help and act in accordance with the requests even though they were not obliged to cooperate.
"Once new European regulations come into effect, European regulators will be obliged to cooperate with each other and the relevant European Supervisory Authority where necessary," Andrew said.
Procter, and Hong Kong-based partner, William Hallatt, will be in Australia this week with the financial services team in Australia to launch the guide, which reviewed challenged in 14 key financial markets around the world.
AUTHOR
Malavika Santhebennur
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