MEMORANDUM OF UNDERSTANDING ON MUTUAL ASSISTANCE AND THE EXCHANGE 

OF INFORMATION BETWEEN THE UNITED STATES SECURITIES AND EXCHANGE 

COMMISSION AND COMMODITY FUTURES TRADING COMMISSION AND THE 

UNITED KINGDOM DEPARTMENT OF TRADE AND INDUSTRY AND SECURITIES 

AND INVESTMENTS BOARD 

The United States Securities and Exchange Commission and 

Commodity Futures Trading Commission on the one hand, and the 

United Kingdom Department of Trade and Industry and Securities 

and Investments Board on the other hand, recognising the 

increasing international activity in the securities, futures and 

investments markets and the corresponding need for mutual 

cooperation between the relevant national authorities, have 

reached the following understanding: 

Definitions 

1. For purposes of this Memorandum of Understanding, 

(a) 11Authority11 means 

(i) for the United States, the Securities and Exchange 

Commission ("SEC") or the Commodity Futures 

Trading Commission ("CFTC11 ) acting with respect to 

their respective areas of jurisdiction; 

(ii) for the United Kingdom, the Department of Trade 

and Industry ( 11 DTI 11 ) or the Securities and 

Investments Board ( 11 SIB11 ) acting with respect to 

their respective areas of responsibility. 

(b) "Investment Businesses 11 means investment businesses, 

investment companies, other collective investment 

undertakings and their equivalents, investment banks, 

merchant banks, brokers, dealers, jobbers, investment 

advisers and investor advisory services and exchanges. 

(c) "Securities Processing Businesses 11 means clearing 

corporations or securities transfer agents. 

(d) 11Futures Businesses 11 means commodity trading advisors, 

commodity pool operators, futures commission merchants, 

introducing brokers, associated persons and floor 

brokers, floor traders, clearing corporations, futures 

and options brokers and dealers and exchanges. 

(e) 11 person11 means a natural person, unincorporated 

association, or body corporate, government, or 

political subdivision, agency, or instrumentality of a 

government. 

(f) 11 issuer" means a person who issues or proposes to issue 

any security·. 

I 
(g) (1) "requested Authority" means an Authority to whom a 

request under this Memorandum is addressed; 

(2) "requesting Authority" means an Authority making a 

request under this Memorandum. 

(h) 11 legal rule or requirement" means: 

(1) for securities, those laws, regulations and requirements 

of the United States and the United Kingdom relating to: 

(A) insider trading in relation to any security; 

(B) misrepresentation or the use of fraudulent, deceptive 

or manipulative practices in connection with the offer, 

purchase or sale of any security; 

(C) the making of a false or misleading statement or 

any material omission in any application or report 

made to the Authorities; 

(D) the conduct of Investment or Securities Processing 

Businesses or reporting requirements imposed on 

such Businesses; 

(E) the financial and other qualifications of those engaged 

in or in control of Tnvestment or Securities Processing 

Businesses; 

(F) the duty to comply with reporting requirements of 

persons whose securities or sponsored depository 

receipts in respect of such securities are 

registered or publicly traded; 

(G) the disclosure of interests in the securities of 

companies; and 

(H) the duties of issuers of and offerors for securities 

to make full and fair disclosure of information 

relevant to investors. 

(2) for futures, those laws, regulations and requirements of 

the United States and the United Kingdom relating to: 

(A) misrepresentation or the use of fraudulent, 

deceptive or manipulative practices in connection 

with the offer, purchase or sale of any futures or 

options contract; 

(B) the making of a false or misleading statement or 

any material omission in any application or report 

made to the Authorities. 

-PAGE N° 2 
(C) the conduct of futures or options trading on, or 

subject to the rules of, the markets of the requesting 

Authority; 

(D) the conduct of Futures Businesses or reporting 

requirements imposed upon such Businesses; and 

(E) the financial and other qualifications of those engaged 

in or in control of Futures Businesses. 

2. The parties recognise that while in their laws, regulations 

and requirements they may define terms differently, requests 

for assistance will not be denied solely on the grounds of 

differences in the definitions used by the requesting and 

requested Authorities. 

Part I: consultations on Matters of Mutual Interest 

3. The Authorities intend to engage in consultations about 

mutually agreeable approaches designed to enhance the 

integrity and efficiency of the securities and futures 

markets of the United States and the United Kingdom, the 

exercise of market oversight functions and the protection of 

investors, while avoiding the conflicts that may arise from 

the application of differing regulatory laws, regulations 

and practices. 

Part II: General Principles 

4. This Memorandum sets forth the basis upon which the United 

States Authorities and the United Kingdom Authorities 

reciprocally propose to provide assistance for the purpose 

of facilitating the performance of their respective 

functions regarding the laws, regulations and requirements 

of the United States and the United Kingdom. Such 

assistance will be provided even where the subject matter of 

the request for assistance does not constitute a violation 

of the laws, regulations and requirements of the requested 

Authority. In these circumstances the requesting Authority 

will determine whether particular conduct could be a 

violation of its laws, regulations and requirements. 

5. This Memorandum sets forth a statement of intent of the 

Authorities regarding mutual assistance and the exchange of 

information between the Authorities. Accordingly, the 

provisions of this Memorandum will not give rise to a right 

on the part of any private person, directly or indirectly, 

to obtain, suppress or exclude any evidence or to challenge 

the execution of a request for assistance under this 

Memorandum. 
6. In response to requests that satisfy the terms of Part III 

of this Memorandum, and subject to the conditions set out in 

Part IV, each Authority will provide the fullest possible 

measure of mutual assistance to the other subject to its law 

and national policy. such assistance may include: 

(a) providing access to information in the files of 

the requested Authority; 

(b) questioning or taking the testimony of persons 

designated by the requesting Authority; 

(c) obtaining specified information and documents 

from persons; 

(d) conducting compliance inspections or 

examinations of Investment or Futures Businesses; 

and 

(e) permitting the representatives of the requesting 

Authority to participate in the conduct of the 

enquiries made by the requested Authority pursuant 

to (b) through (d) of this paragraph. 

7. The Authorities recognise the need and desirability of 

providing mutual assistance and exchanging information to 

assist each other in securing compliance with their 

respective legal rules or requirements. However, assistance 

may be denied on grounds of public interest. 

8. The Authorities have defined 11 legal rule or requirement'' to 

ensure that assistance will be provided in the maximum 

number of circumstances. However, the Authorities 

acknowledge that certain requests may relate to a possible 

breach of laws, regulations and requirements that involve an 

assertion of jurisdiction not recognised by a requested 

Authority. Where a requested Authority considers that an 

assertion of jurisdiction in a matter that is the subject of 

a request would conflict seriously with and prejudice its 

sovereign interests the request will be denied. 

9. The Authorities recognise that, so long as there are 

differences in the scope of the laws, regulations and 

requirements applied in each country, conduct prohibited by 

the Authorities in one country may not be prohibited by the 

Authorities in the other. The Authorities intend to engage 

in consultations about individual cases falling outside the 

scope of the definition of legal rule or requirement to 

determine whether assistance will be provided in such cases. 

PAGE N" 4 

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10. Either the DTI or the SIB may refer a request to the other 

and, if it does so, it will at the same time notify the 

requesting Authority. 

11. This Memorandum does not extend to information held by the 

DTI solely by virtue of powers and functions that relate to 

matters other than securities, investments, futures or 

company law. 

Part III: Requests for Information 

12. Any request for information made under this 

MemorandUm will satisfy the following requirements: 

(a) wherever possible it will be in writing but in cases of 

urgency it may be oral, and confirmed in writing within 

10 days; 

(b) it will clearly specify the following: 

( i) 

( ii) 

(iii) 

(iv) 

the information requested; 

the general purpose for which the information 

is sought, indicating in particular the legal 

rule or requirement pertaining to the matter 

that is the subject of the request; 

a description of the conduct and its 

connection with the jurisdiction of the 

requesting Authority. However, where the 

legal rule or requirement in question is that 

a person be fit or qualified to set up or 

carry on an Investment, Securities Processing 

or Futures Business, or otherwise involves 

the conduct or qualifications of an 

Investment, Securities Processing or Futures 

Business, it is sufficient compliance with 

this subparagraph to specify that information 

is sought for that purpose; 

the identity of the person, if known, whose 

conduct causes concern. However, where the 

relevant rule or requirement falls within 

paragraph l(h) (1) (A) through (C) or 

l(h) (2) (A) and (B) above, it is sufficient 

compliance with this subparagraph to specify 

that information is sought concerning the 

purpose specified in accordance with (ii) 

above in order to identify the person(s) 

against whom proceedings or actions are to 

be, or may be, taken; and 
(v) where it is apparent to the requesting 

Authority that another person may obtain the 

information for a purpose other than securing 

compliance with or enforcing the legal rule 

or requirement specified under subparagraph 

(ii) above in respect of the person(s) (if 

any) specified under subparagraph (iv) above, 

to the extent penni tted by the laws of the 

jurisdiction of the requesting Authority, the 

particulars of that person and that person's 

interest; and 

(vi) particular procedures contemplated in Part IV 

of this Memorandum that it requests be 

utilised for questioning, taking testimony or 

conducting inspections; 

(c) it will be addressed to one of .the requested 

Authority's contact officers listed in Annex I, or that 

person's nominee, pursuant to written notice to the 

requesting Authority; and 

(d) the requested information must be reasonably relevant 

to securing compliance with the legal rule or 

requirement specified in the request. 

In any case where a requested Authority is not satisfied 

that a request fully complies with the requirements of this 

paragraph, it may require the Director of the Office of 

International Affairs of the SEC or the Director of the 

Division of Enforcement of the CFTC, or the Under Secretary, 

Financial Services Division, DTI, or the Group Director, 

Compliance and Enforcement of the SIB, where applicable, to 

certify that the request is cognisable under the terms of 

this Memorandum. A requested Authority may not challenge 

such a certification except on substantial grounds which 

will be fully stated in writing. 

Part IV: Procedures for questioning or taking testimony and 

conducting inspections 

13. In accordance with paragraph 6: 

(a) questioning or taking the testimony of persons, if 

requested, will be conducted in the same manner and to 

the same extent as investigations or other proceedings 

under the laws of the jurisdiction of the requested 

Authority; 

(b) when requested by the requesting Authority, questioning 

or taking testimony will be conducted under oath and a 

transcript will be made; 

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(c) a representative of the requesting Authority may be 

present at the questioning or testimony, may prescribe 

specific questions to be asked of any witness and, 

pursuant to paragraph 14 of this Memorandum, may 

otherwise participate in the examination of any 

witness. 

14. Subject to the following conditions, a requested Authority 

may grant a request made by the requesting Authority that a 

person or persons designated by the requesting Authority, 

including representatives of the requesting Authority, be 

permitted to conduct the interrogation of any person, or 

participate in the inspection or examination of the books 

and records of an Investment or Futures Business or its 

custodian or agent: 

(a) the requesting Authority must specify the reasons for 

this request·;-

(b) the request may be granted or denied by the requested 

Authority in its discretion. The requested Authority 

may impose such conditions on the participation of the 

requesting Authority as it deems appropriate; 

(c) if the request is granted and the laws of the 

jurisdiction of the requesting Authority require the 

opportunity for the witness to consult with legal 

counsel, or for counsel to the witness to pose 

questions to the witness, such participation will, 

subject to (b) above, be permitted; and 

(d) if the request is denied, the Authorities agree to 

consult pursuant to paragraph 24 of this Memorandum 

concerning the reasons for the denial and the 

circumstances under which the request might be granted. 

15. Notwithstanding any other provision of this Memorandum, any 

person providing testimony 1 information or documents as a 

result of a request made under this Memorandum will be 

entitled to all the rights and protections of the laws of 

the jurisdiction of the requested Authority. Where 

assertions are made regarding other rights and privileges 

arising exclusively pursuant to the laws of the jurisdiction 

of the requesting Authority, the Authorities will consult to 

determine the most appropriate way to proceed. 

I'A(iJ' N" 7 
Part v: Permissible Uses and confidentiality 

16. Information received will be used solely for the purpose of: 

(a) securing, through enquiries, investigations or 

litigation, compliance with or enforcement of the legal 

rule or requirement specified in the request, provided 

that the information may be used to secure compliance 

with or enforcement of other applicable legal rules or 

requirements in proceedings in which a violation of the 

legal rule or requirement specified in the request is 

alleged; 

(b) securing compliance with or enforcement of a legal rule 

or requirement that was not specified in the request in 

proceedings in which a violation of the legal rule or 

requirement specified in the request is not alleged, if 

prior- to such use, the requesting Authority informs the 

requested Authority of its intention to use the 

information for such purposes and the requested 

Authority does not object; or 

(c) conducting civil or administrative enforcement 

proceedings, assisting in a criminal prosecution, or 

conducting any investigation related thereto for any 

general charge applicable to the violation of the legal 

rule or requirement identified in the request. 

17. The requesting Authority will keep confidential any 

information provided under this Memorandum subject to the 

terms of this paragraph, unless it is disclosed in 

furtherance of the purpose for which it was requested under 

paragraph 16 above: 

(a) except as contemplated by paragraph 16 above, the 

requesting Authority will not offer the information to, 

and will use its best efforts to ensure that it is not 

obtained by, any other person. Unless otherwise 

agreed, in the event that such information is obtained 

by any public body, the requesting Authority will use 

its best efforts to ensure that it will not be used by 

that body in any way that involves its disclosure to 

any other person; 

(b) if the requesting Authority becomes aware that the 

information has been or is likely to be disclosed 

otherwise than as contemplated by paragraph 16 above, 

it will inform the requested Authority of the 

situation; and 

I 
(c) after the requesting Authority has terminated the 

matter for which assistance has been requested under 

this Memorandum, upon request of the requested 

Authority, it will return to the requested Authority, 

to the extent permitted by the laws of the jurisdiction 

of the requesting Authority, all documents and copies 

thereof not already disclosed in proceedings referred 

to in paragraph 16 above, and other material disclosing 

the content of such documents, other than material 

generated as part of the deliberative, investigative, 

internal or analytical process of the requesting 

Authority, which may be retained. 

18. Any document or other material provided by an Authority in 

response to a request under this Memorandum and any copies 

or other material disclosing its content, other than 

material generated as part of the deliberative, 

investigative, internal or analytical process of the 

requesting Authority, will not become the property of the 

requesting Authority, and must be redelivered to the 

requested Authority without delay on demand to the extent 

permitted by the laws of the jurisdiction of the requesting 

Authority; provided that such demand may be made only if the 

requested Authority has reason to believe that the 

information has been or is likely to be disclosed or used 

otherwise than as contemplated by paragraph 16 above. 

19. Each Authority will keep confidential to the extent 

permitted by law any request for information made under this 

Memorandum and any matters arising in the course of its 

operation, including consultation under this Part or Part I 

of this Memorandum, unless: 

(a) such disclosure is absolutely necessary to carry 

out the request; or 

(b) the other Authority waives such confidentiality. 

A requesting Authority may specify that if the requested 

Authority considers such disclosure to be absolutely 

necessary, then the Authorities will consult before such 

disclosure is made. 

This paragraph does not apply to general matters of proper 

public interest relating to the operation of this 

Memorandum. 

?art VI: Other Means of Obtaining Information 

20. The Authorities have various powers to obtain information in 

the exercise of regulatory functions that are within the 

scope of this Memorandum. If, in the exercise of its 

PMi1°N° 9 

I 
powers, any Authority obtains information that it recognises 

as clearly giving rise to a suspicion of a breach of any 

legal rule or requirement of any other Authority, then it 

will, to the extent permitted by law, offer to provide such 

information to such Authority for any purpose, and subject 

to compliance by the other with any conditions that would 

have been applicable had a request pursuant to this 

Memorandum been made. 

21. Where one Authority wishes to make enquiries of, or seek 

information from, a person within the territory of another 

Authority on a voluntary basis, the enquiries will be 

conducted in accordance with arrangements agreed between the 

Authorities. 

22. The execution of this Memorandum will not prejudice the 

respective positions of the Authorities concerning the use 

of procedures for obtaining information other than as 

provided for in this Memorandum. 

Part VII: Costs 

23. When the costs of providing or obtaining information under 

this Memorandum are substantial, the requested Authority may 

require the requesting Authority to undertake to pay those 

costs. In such an event the relevant Authorities will 

consult on the issue at the request of either Authority. 

Part VIII: Consultations and waiver 

24. The Authorities will keep the operation of this Memorandum 

under continuous review and consult with a view to improving 

its operation and resolving any matters. In particular, any 

Authority will consult another Authority upon request in the 

event of: 

(a) a request being denied in whole or in part; 

(b) a change in market or business conditions or in the 

laws, regulations or requirements governing the matters 

mentioned in paragraph l(h) above, or any other 

difficulty arising which makes it necessary to amend or 

extend this Memorandum in order to achieve its 

purposes; or 

(c) an assertion by the requested Authority that the 

provision of assistance would be so burdensome as to 

disrupt the proper performance of its functions. 

25. Where the specific conduct set out in the request for 

assistance may constitute a breach of a legal rule or 

requirement in both the territory of the requesting and the 

PAGE N~ 10 
requested Authorities 1 the relevant Authorities will consult 

in order to determine the most appropriate means for each 

Authority to provide assistance. 

26. In cases where the requested Authority is either the SEC 

or CFTC, denial of a request under paragraph 7 or 8 will be 

made by its respective Commission after consultatien with 

relevant officials within the United States Government, and 

in cases where the requested Authority is a UK Authority, 

such a denial will be made by the Secretary of State. 

27. Any of the conditions of this Memorandum may be relaxed or 

waived by mutual agreement. 

Part IX: Termination 

28. This Memorandum will continue to have effect unless 

terminated by the SEC and CFTC, on the one hand, or the DTI 

and SIB, on the other hand, by giving 30 days advance 

written notice to the other Authorities that the 

understandings set out herein are no longer to have effect. 

Such notice may in particular be given in consequence of a 

change in the laws or regulations applicable to any matter 

governed by this Memorandum which is regarded by an 

Authority as material and in the absence of an agreed 

amendment to take account of the change. The SEC, CFTC, DTI 

or SID may withdraw from participation in this MOU only with 

respect to areas of the Memorandum regarding that 

Authority's areas of competence and the arrangements 

relating thereto. Termination by the DTI may take effect 

with respect to the areas within the competence of the SEC 

andjor the CFTC and the arrangements relating thereto and 

will be so specified. 

PAGEN' l\ 
Part X: Entry into Effect 

29. This Memorandum will be effective from the date of its 

signature by the United States Securities and Exchange 

Commission, the United States Commodity Futures Trading 

Commission, the United Kingdom Department of Trade~nd 

Industry and the United Kingdom Securities and Investments 

Board. 

SECURITIES AND 

EXCHANGE COMMISSION 

Richard C. Breeden 

Chairman 

COMMODITY FUTURES 

TRADING COMMISSION 

Jl&n'" £ .tlLOn~d •• ~ Wendy G~~ Chairman 

DEPARTMENT OF TRADE 

AND INDUSTRY 

John Redwood 

Minister of State for 

Corporate Affairs 

SECURITIES AND 

INVESTMENTS BOARD 

sir 

~G~ Da 1d Walker 

Chairman 

PNiE N" !I 

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