Not before time, America’s SEC is drawing up plans to give US investors easier access to overseas markets – but some investor groups for a variety of reasons, warn that it is acting too quickly, reports the WSJ on Tuesday.
The SEC’s potential moves include signing agreements with non-US regulators based on a comparison of the different regulatory regimes; considering adopting a formal process to discuss recognising other regulators, including those of the EU; and lowering the minimum amount of assets needed to engage directly with non-US brokers from the current $100m.
It all sounds reasonable to us, and SEC chairman Christopher Cox seems to have the right idea, having pledged to globalise the SEC’s rules in accounting, oversight and financial-reporting language to stay in step with trends overseas.
But while the Fed and other US agencies have proven they can move at lightning speed on some issues, we have a bad feeling about this one, particularly after some investor groups have characterised the SEC’s latest statement as an attempt to push through changes before the election [could this be?].
Wall Street, on the other hand, argues [quite reasonably, it would seem] that the SEC should move swiftly to get a system in place.
As the FT asks in a special report on international accountancy on Tuesday: If Europeans and others can switch accounting standards in three years, how long will Americans need?
There really shouldn’t have to be much debate about it – but the rumblings from investor groups suggest you’re going to hear a lot more about these proposals. At issue, says the Journal, is the push to open up foreign markets to US investors – which would involve reducing transaction costs while ensuring protection for investors. The SEC had tentatively scheduled voting on proposals in December but postoned them indefinitely when commissioners couldn’t agree on an approach.
Two of the initiatives outlined by the SEC on Monday focused on striking initial agreements with some regulators and then considering adopting a formal process “through rulemaking or other appropriate mechanisms” to discuss mutual recognition with other regulators.
It sounds like something that ought to be uncontroversial. But Jeff Mahoney, general counsel at the Council of Institutional Investors, said he hoped that this “important series of actions would be subject to a public comment period” and not passed by SEC commissioners without a public vetting, according to the Journal.
There is no help coming from the political side, either, it seems, for while Democrats and Republicans and business and shareholder groups are in favor of mutual recognition, “they split when it comes to how far it should go and when”, adds the Journal.