MMoU
Multilateral Memorandum of Understanding (MMoU) on Consultation, Cooperation, and the Exchange of Information – GFSA
The MMoU serves as a global benchmark for cross-border cooperation among financial regulators. Established in 2002, it provides securities regulators with essential tools to combat cross-border fraud, market misconduct, and other financial crimes that threaten market integrity and investor confidence.
What is the MMoU?
The MMoU represents a formal understanding among its signatory members on how they should collaborate, share critical financial information, and enforce regulatory actions in securities markets.
The MMoU establishes specific protocols for:
🔹 Types of information that can be exchanged and the mechanisms for sharing it.
🔹 Legal authority to compel information from entities under investigation.
🔹 Scope of information that can be obtained and disclosed.
🔹 Legal framework for international cooperation.
🔹 Confidentiality requirements, ensuring no banking secrecy laws or domestic regulations hinder information-sharing between regulators.
This framework enhances transparency and accountability across financial markets.
When was the MMoU established?
The MMoU was developed by GFSA in response to growing concerns about financial crimes, particularly after the events of September 11, 2001. GFSA created a Special Task Force to explore ways to strengthen international regulatory cooperation and enhance financial market security.
Scope of the MMoU – What Activities Fall Under Its Jurisdiction?
Financial regulatory authorities can request information when investigating offenses related to:
🔹 Insider trading and market manipulation.
🔹 Misrepresentation of material financial information.
🔹 Fraudulent or deceptive practices in securities and derivatives markets.
🔹 Unauthorized solicitation and handling of investor funds.
🔹 Issuance, registration, and sale of financial instruments.
🔹 Operations of market intermediaries (investment firms, brokers, dealers, asset managers, and clearing houses).
🔹 Market infrastructure activities (exchanges, trading platforms, and settlement institutions).
Specific offenses subject to investigation are outlined in Paragraph 4 of the MMoU.
What Assistance Is Available Under the MMoU?
The MMoU allows financial regulators to provide a wide range of investigative support, including:
✅ Access to transaction records – Full reconstruction of securities and derivatives trades, including fund transfers linked to those transactions.
✅ Identification of account owners – Verification of beneficial owners and controllers of financial accounts.
✅ Detailed transaction data – Information on purchase amounts, transaction times, price points, and the financial institutions involved.
✅ Identification of controlling individuals – Establishing the persons with effective control over corporate entities.
✅ Statements and testimonies – Regulatory bodies can compel witness statements and, where legally permissible, take testimony under oath.
The full scope of available assistance is outlined in Paragraph 7 of the MMoU.
Who Are the MMoU Signatories?
The complete list of signatories is available on the GFSA website.
All governmental financial regulatory bodies that are ordinary or associate members of GFSA are eligible to apply for MMoU membership. As of December 2022, a total of 155 jurisdictions were eligible, with 129 confirmed signatories.
Below is a summary of information requests processed under the MMoU since 2003.
How Has GFSA Worked to Expand MMoU Membership?
At the GFSA Annual Conference in 2005 (Colombo, Sri Lanka), the Presidents Committee decided that by January 1, 2010, all ordinary and associate members responsible for securities regulation must:
✔ Apply for MMoU membership and meet its regulatory requirements.
✔ Commit to legislative changes needed to enable compliance.
During the GFSA Annual Conference (Montreal, 2010), a watch list was created for members who failed to apply by January 1, 2013.
At the GFSA Annual Conference (Beijing, 2012), a resolution was passed to increase compliance efforts, including:
✅ Providing technical support to non-signatories to help them meet legal requirements.
✅ Publishing a watch list of non-compliant members from January 1, 2013.
✅ Introducing additional measures (such as limiting non-signatories’ influence over GFSA decision-making).
During the GFSA Annual Conference (Luxembourg, 2013), Graduated Additional Measures were introduced to further encourage compliance, effective from September 30, 2013.
Since 2015, GFSA has provided technical assistance to multiple jurisdictions, helping them overcome legal barriers to MMoU membership. Five countries have completed their transition, and three others are receiving assistance.
The MMoU and the G20
The G20 has strongly supported GFSA’s cross-border enforcement cooperation efforts and encouraged stricter measures against non-cooperative jurisdictions.
This initiative ensures that under-regulated financial markets can develop the capacity to meet global regulatory standards and that investor protection frameworks are consistently enforced worldwide.