In her first 18 days at chairman of the Securities and Exchange Commission, Mary Jo White has spent a lot of time looking beyond U.S. borders.
“A defining fact of life at the SEC today is that we are not alone in the global regulatory space,” Ms. White told an audience at an Investment Company Institute conference in Washington today. “Enhancing our profile as a globally focused regulator is an ongoing priority at the SEC. From accounting standards to Ponzi schemes, from annual reports to [over–the-counter] derivatives, the SEC is determined to maintain a regulatory structure that accommodates jurisdictional differences without lowering standards.”
Sworn into office April 10, Ms. White already has met with financial regulators from Canada, China, Europe, Japan, Mexico, Singapore, Switzerland and Australia. The ICI speech was her first major public address.
The SEC's emphasis on global regulation doesn't just involve regulators in foreign capitals, according to Ms. White. It's an effort that touches on investors who are seeking higher returns in international markets through mutual funds, exchange-traded funds and closed-end funds.
“Our collaborations with international regulators and considerations of international standards are also meant to protect America's mom-and-pop investors: workers, families and future retirees who recognize that we live in a global marketplace and seek to maximize their options and returns by looking abroad — or to funds that invest abroad — for opportunities,” Ms. White said.
The mutual fund industry now spans 45 countries and totals $27 trillion in assets, about $13 trillion of which is managed by 7,600 firms based in the United States.
“Many of those funds invest in foreign issuers listed in the U.S. or they invest overseas,” Ms. White said. “Consequently, if there is an accounting scandal in Brazil or a market disturbance in Frankfurt or Hong Kong, American clients of these funds can be harmed.”
Global coordination of enforcement also is becoming more important, Ms. White said. She said the SEC has formed a cross-border working group that is proving effective.
“As a result, we have brought numerous cases against China-based issuers involving market manipulation, accounting and disclosure violations, and auditor misconduct, among other charges,” Ms. White said. The SEC also has revoked the registration of at least 53 foreign-based issuers.
Although implementing nearly 100 mandatory Dodd-Frank rules demands a domestic orientation, the SEC will continue to maintain global awareness.
“American investors are focused on international investing in a global marketplace,” Ms. White said. “American regulators must be, as well.”