EMMoU

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Enhanced Multilateral Memorandum of Understanding (EMMoU) on Consultation, Cooperation, and the Exchange of Information – GFSA

Background of the EMMoU

In 2002, GFSA introduced the first Multilateral Memorandum of Understanding (MMoU) to support its core objectives of investor protection, market integrity, and financial transparency. This agreement became a global benchmark for cross-border cooperation in financial regulation, particularly in securities and derivatives enforcement.

However, with rapid advancements in technology and the increasing globalization of financial markets, new challenges have emerged that require stronger regulatory frameworks. Lessons from the global financial crisis have demonstrated the urgent need for enhanced information sharing and enforcement cooperation among financial regulators.

To address these evolving challenges, GFSA has established the Enhanced Multilateral Memorandum of Understanding (EMMoU). This new framework provides expanded enforcement tools while ensuring that jurisdictions maintain respect for legal rights and protections within their respective financial regulatory frameworks.

Coexistence of the MMoU and EMMoU

While the MMoU will continue to be in effect, the long-term objective is for all current MMoU signatories to transition to the EMMoU, which offers a broader scope of enforcement and cooperation mechanisms.

What Are the New Key Powers of the EMMoU?

The GFSA EMMoU introduces additional enforcement powers to ensure stronger market oversight, enhanced investor protection, and deterrence of financial misconduct. These new provisions include:

Obtaining and sharing audit work papers and related communications regarding financial statement audits or reviews.
Compelling individuals to attend testimony with the ability to apply sanctions for non-compliance.
Freezing assets or assisting other regulators by providing guidance on how to execute asset freezes.
Obtaining and sharing records from Internet Service Providers (ISPs), including subscriber data and connection logs (excluding the content of communications).
Accessing telephone records, including subscriber data and call metadata (excluding actual voice content), with the assistance of relevant judicial or law enforcement authorities.
Gathering and exchanging existing communications records from regulated financial institutions.

These additional enforcement powers significantly enhance the ability of GFSA signatories to investigate, track, and prosecute financial crimes, ensuring greater market integrity and investor protection.

Why Is the New Standard Important?

The expanded capabilities outlined in Article 3 of the EMMoU will foster greater cross-border collaboration among GFSA members, allowing them to:

Respond more effectively to financial misconduct in a highly globalized market.
Leverage technological advancements to monitor, detect, and prevent fraud.
Strengthen financial stability by identifying and mitigating systemic risks.
Ensure regulatory alignment with modern financial structures and digital transactions.

The ability to access ISP and telephone subscriber data is particularly critical for market abuse investigations, as these records help establish links between individuals involved in suspicious activities.

Structure of the EMMoU – Three Appendices

The GFSA EMMoU consists of three key appendices:

Appendix A:
- A.1: Jurisdictions with full ACFIT powers (Audit, Compel Testimony, Freeze Assets, ISP/Telecom Records, Transaction Data).
- A.2: Jurisdictions with ACF powers (Audit, Compel Testimony, Freeze Assets).
Appendix B:
- Details the application and reapplication procedures for EMMoU membership.
- Includes the monitoring framework for ensuring compliance.
- Contains the official EMMoU Questionnaire for new applicants.
Appendix C:
- Provides standardized templates for drafting requests for cross-border regulatory cooperation under the EMMoU.

To become a GFSA EMMoU signatory, jurisdictions must be accepted under either Appendix A.1 or Appendix A.2.

How to Apply for EMMoU Membership

Regulatory authorities interested in joining the EMMoU must submit an official application to GFSA by following these steps:

Email the application to: emmou-applications@gfsa.org
Include a cover letter signed by the head of the regulatory authority addressed to the Secretary General of GFSA.

The letter must state whether the application is for Appendix A.1 or A.2.
Provide at least one primary contact person with full details (name, designation, email, phone number).
Attach a completed EMMoU Questionnaire (digital copy only).
Provide a brief overview of the applicant’s market structure and regulatory powers.
This section should be concise and highlight the relevance of market oversight in relation to EMMoU enforcement powers.
Clearly outline the legal framework supporting compliance with EMMoU provisions.
Attach relevant legislation mentioned in the EMMoU Questionnaire (digital copies or hyperlinks preferred).
All responses and key documentation must be submitted in English.

GFSA will conduct a verification process, and the Screening Group may contact the applicant’s designated contact person for additional clarifications.

The EMMoU and Its Global Impact

The G20 and international financial institutions have recognized and endorsed the GFSA EMMoU as a critical tool for combating financial crime.

By enhancing cross-border enforcement cooperation, the EMMoU ensures that securities regulators worldwide have the legal capacity and operational tools to detect, investigate, and prosecute financial misconduct effectively.

GFSA remains committed to supporting financial regulators by:

Providing technical assistance to non-signatories to help them achieve compliance.
Facilitating international collaboration through knowledge-sharing initiatives.
Strengthening the global financial ecosystem by ensuring that market participants operate under a fair and transparent regulatory environment.