On September 21, 2016, Mary Jo White, Chair of the U.S. Securities and Exchange Commission (SEC) spoke at a Legal Practice Division Luncheon at the International Bar Association Annual Conference. She discussed the complexities of regulation of the world’s capital markets in the present interconnected and global marketplace, including the importance of enforcing the Foreign Corrupt Practices Act (FCPA).
First, White discussed the SEC’s current efforts to update and improve SEC regulation of the asset management industry as a core responsibility of the SEC under the Investment Company Act and the Investment Advisers Act. White noted that this is of significant interest to other domestic and international authorities attempting to regulate the industry and assess systemic risks to financial stability.
Second, White discussed international sharing of information and data protection, namely increasing the SEC’s ability to examine non-U.S. based registrants for compliance with SEC laws and regulations. White noted that while various countries’ laws are designed to achieve important national objectives, they also frequently create obstacles to cross-border flows of information, thus complicating, and in some instances impeding, regulators’ ability to carry out their supervisory responsibilities. In encouraging international collaboration, White emphasized securities regulators’ overarching obligation to protect investors through robust international cooperation.
Third, White reported on the SEC’s FCPA enforcement program in 2016, and confirmed that enforcement of the FCPA is a high priority for both the SEC and the Department of Justice (DOJ). White stated that the SEC vigorously enforced the FCPA in 2016 by filing more than 17 actions against entities and individuals—a nearly 30 percent increase from 2015—thereby obtaining more than $290 million in monetary remedies. Further, the SEC also has prioritized charging individuals involved in bribery schemes, a pattern that White indicated is likely to continue.
White emphasized that successful enforcement depends on international cooperation and assistance, and the list of countries cooperating and assisting the SEC with complex international investigations is expanding. White cited a 2015 report by the Organisation for Economic Co-operation and Development (OECD) that provided that bribery of foreign officials is now a crime in all 41 countries that are parties to the OECD Convention—which combined, covers 64 percent of global outbound foreign direct investments, more than 50 percent of the world’s exports, and also are home to 95 of the largest 100 non-financial and all of the top 50 financial multinational enterprises in the world.
White further emphasized that regulatory action to stop foreign bribery must be a global regulatory priority and expressed the SEC’s continued commitment to enforce the FCPA and to assist international efforts to expand and strengthen anti-bribery laws and enforcement throughout the world, including support of the OECD’s Working Group on Bribery.
White urged all securities regulators worldwide to be cognizant of their global responsibilities, in addition to their domestic responsibilities, including raising the bar on world-wide enforcement efforts to combat corrupt corporate payments, through the FCPA, a program whose success is dependent on international cooperation.
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