responding to cross‑border financial services …markets in financial instruments directive (...

RESPONDING TO CROSS‑BORDER FINANCIAL SERVICES INVESTIGATIONS

THE LONG ARM OF REGULATION August 2015

LEGAL GUIDE THIRD EDITION

CONTENTS

Preface 02Herbert Smith Freehills global contacts 05Australia 06China 14Dubai International Financial Centre 19France 25Germany 30Hong Kong 33Japan 40The Netherlands 44Russia 50Singapore 54Spain 58Switzerland 62United Kingdom 68United States 75Annex 1 79Annex 2 84Annex 3 86

The contents of this publication, current as at 01 August 2015 set out above, are for reference purposes only. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action based on this publication.

© Herbert Smith Freehills LLP 2015

02 HERBERT SMITH FREEHILLS

Welcome to the third edition of "The long arm of regulation: responding to cross-border financial services investigations". Reflecting the increased breadth and depth of our global expertise, this edition includes new chapters covering Germany, Singapore and the US.

The growth of cross-border financial services and sustained pressure on regulators post financial crisis to deliver tangible results are driving regulators to increasingly seek assistance from their overseas counterparts in investigating issues, most notably in cases involving abuse of the markets. Firms, in turn, are increasingly subject to scrutiny by overseas regulators and may be investigated and ultimately sanctioned in multiple jurisdictions in respect of the same conduct. These trends seem set to continue: questions such as how and when regulators interact with each other and with firms across borders, how firms are expected or required to respond, and whether duplicate proceedings can be brought in different jurisdictions, are more pertinent than ever. This publication gives an overview of the answers across 14 key jurisdictions, and seeks to assist firms in navigating the differing regimes.

In compiling this publication, we have sought to highlight some of the interesting similarities, and divergences, which have emerged.

Breadth of powers

In each of the jurisdictions surveyed in this guide, the regulators have sweeping powers to assist overseas regulators. This reflects the influence of the principles embodied in the IOSCO Memorandum of Understanding on consultation, cooperation and the exchange of information, and in EEA jurisdictions, of the Committee of European Securities Regulators Memorandum of Understanding on the exchange of information, and requirements to cooperate in a range of European legislation, most notably the Markets in Financial Instruments Directive (MiFID) and, from July 2016, the new Market Abuse Regulation (MAR).

Perhaps unsurprisingly, all the regulators surveyed in this guide (with the exception of the Hong Kong Monetary Authority) can, at the request of an overseas regulator, appoint an investigator to investigate an issue, obtain information/documents from firms/individuals, and compel attendance at interviews and answers to questions. Whilst a wide range of firms/individuals can be required to respond in this situation, in many jurisdictions (the UK, Australia, Hong Kong, France, Netherlands, Dubai*, the US and Singapore), the powers may be exercised in respect of any person, whether or not involved in the financial services industry. In Dubai and the Netherlands, the regulators' powers to obtain information extend to anyone outside of the jurisdiction. Further, in half of the jurisdictions surveyed (ie Spain, UK, Switzerland, Russia, France, Germany and Singapore), regulators are ultimately able to change or cancel a firm's permission to carry out financial services activities following a request by an overseas regulator.

Where national regulators intend to share information with overseas regulators, the scope and opportunity for affected firms to object may be limited. This follows from the fact that in the 14 jurisdictions, regulators have a very wide discretion to comply with requests, and there is no general requirement (except in certain situations in Switzerland and Australia) for firms to be notified before any information is transmitted.

It is interesting to note that despite sweeping powers enabling national regulators to assist overseas regulators, none of the regulators included in this publication have to date been under a strict obligation to cooperate. That said, all indications are that regulators are eager to, and do, comply with requests. The position is however set to change when new European regulations (notably including MAR and MiFID II) come into application. These provisions will create an obligation for European regulators to cooperate, with each other and with the relevant European Supervisory Authority, where necessary for the purposes of the relevant regulation or directive (save in defined "exceptional" circumstances).

Mechanisms exist for overseas regulators to obtain information directly from firms, but may not be enforceable

In eight of the jurisdictions surveyed (ie, UK, France, Netherlands, Spain, Hong Kong, Switzerland, Germany and Russia), there are mechanisms that enable an overseas regulator to request information directly from firms. It is particularly noteworthy that the number of direct requests from regulators in EEA Member States to overseas EEA firms has risen over recent years, as increasing use is being made of an enabling protocol in MiFID. However, only in three of these eight jurisdictions is there a mechanism to enforce these direct requests. In the Netherlands and Germany, the regulators can issue a formal direction requiring compliance that may result in a penalty. In France, firms can be

THE LONG ARM OF REGULATION:


03RESPONDING TO CROSS-BORDER FINANCIAL SERVICES INVESTIGATIONS

sanctioned as if they had refused to comply with a request from the national regulator. The Spanish authorities have fined a Gibraltar bank (passporting services in Spain without a place of business there) for failing to provide information direct to the Spanish authorities, despite the Gibraltar regulator's suggestion to use the established mutual cooperation route in order to protect the firm from breach of confidentiality obligations under Gibraltar law. In Singapore, although there is no express provision enabling direct requests from overseas regulators, the Monetary Authority of Singapore can order compliance with such a request; non-compliance may result in a penalty and/or imprisonment.

Whether information can be withheld from regulators varies considerably

Whether information can be withheld from regulators on the basis of legal privilege varies to a significant extent across the 14 jurisdictions. Such divergences can create difficulties for firms in determining whether certain information can be disclosed or withheld in any particular case. In many jurisdictions, the concept of legal privilege is enshrined in the law. Nevertheless, regulators may put pressure on firms to disclose legally privileged material even when production cannot be compelled. In Spain, where the regulator has conclusive evidence of a regulatory infraction, a firm can be sanctioned for failing to provide information even if it is legally privileged (although the sanction may be appealed on the basis that the information was protected from disclosure). It is not uncommon for the UK's conduct regulator to be in disagreement with firms about the scope of privilege.

In some jurisdictions, such as Japan and China, legal privilege is not recognised at all. In others, it only applies in limited circumstances. For example, in Russia financial institutions and individuals who are not lawyers cannot withhold documents on the basis of legal privilege. In Switzerland, communications by in-house lawyers are not covered by legal privilege; production of such communications could also arguably be compelled under powers exercised by the European Supervisory Authorities.

The extent to which evidence can be withheld on the basis of the privilege against self-incrimination across the jurisdictions also varies enormously. This, again, may create difficulties for those seeking to navigate the regimes. In Russia, Spain, France and the US, information can be withheld on the basis of the privilege against self-incrimination (although in France, this will be noted in the investigation report). In other jurisdictions, this privilege can be relied onto a limited extent. For example, in Hong Kong, the Netherlands, Australia and the UK, an individual must disclose incriminating information, but the information cannot be adduced as evidence in criminal proceedings; in the UK and the Netherlands, criminal proceedings include market abuse cases. In Hong Kong self-incriminating information can be adduced in civil market abuse proceedings. In Germany, it is unclear whether a

person may refuse to disclose documents on the basis of the privilege against self-incrimination. In China, the privilege against self-incrimination is not recognised at all. In Japan, the law is unclear, in that although the privilege is not explicitly applicable to regulatory proceedings, it may be engaged where a criminal investigation is involved.

Finally, in nearly all surveyed jurisdictions, client confidentiality is unlikely to provide a basis on which financial institutions can withhold information from the regulators who require its production. In Germany, firms and individuals who are subject to a statutory duty of confidentiality as a result of their profession (eg, lawyers) can refuse to provide information. A narrow exception to disclosure on the basis of confidentiality exists in the UK, but it does not apply if the firm or client is under investigation.

Severe consequences for failing to comply

The importance of fully complying with requests for information, documents, interviews and answers to questions is underscored by the severe penalties that may be imposed in the event of a failure to comply. In Japan, staff responsible for a securities broker's failure to cooperate with the regulator can be punished with imprisonment for one year (with labour). In Switzerland, a person who negligently provides false information can be imprisoned for up to three years; false witness testimony can be punished with five years' imprisonment; and the regulator can remove directorships, revoke licences and prohibit individuals from acting in any management capacity. In Hong Kong, a failure to comply with a request from the Securities and Futures Commission (SFC), or knowingly or recklessly providing false and misleading information to the SFC, could result in up to seven years' imprisonment, where there is an intent to defraud. In the US, failure by an entity regulated by the Securities and Exchange Commission (SEC) to comply with a request for information (other than pursuant to subpoena) can result in imprisonment; however, if the request is made under subpoena, then failure to comply will expose the person to contempt proceedings. In Singapore, a failure to comply with an order to provide assistance can be punished with two years' imprisonment.

Firms/individuals may be sanctioned in multiple jurisdictions for the same conduct

The question of whether firms or individuals can be subject to sanctions in multiple jurisdictions in respect of the same conduct is a key question considered in this publication: the answer varies across the jurisdictions. Spain and Germany are the only jurisdictions covered by this publication where the principle against double jeopardy would prevent the domestic regulator from bringing regulatory and criminal action where the same firm/individual has already been sanctioned by an overseas regulator. In other jurisdictions (namely Hong Kong, Switzerland, the UK,

04 HERBERT SMITH FREEHILLS

Australia, Singapore, the Netherlands and the US), the regulators can bring regulatory, administrative or civil proceedings, even where the firm has already been sanctioned overseas in respect of the same conduct. However firms in these jurisdictions are protected from duplicative criminal proceedings to a large extent. In other jurisdictions, such as Dubai, Japan and China, the principle against double jeopardy does not apply at all (although in Japan and China, criminal penalties may be reduced where a criminal sanction has already been imposed abroad).

Whilst it is clear that firms can simultaneously be subject to investigation by regulators in different jurisdictions in respect of the same matter, it is less clear how regulators are required to coordinate with each other. A failure on the part of regulators to synchronise their actions, together with variances in regimes as highlighted above, can cause real practical difficulties for firms in the internal management of the process. The European Securities and Markets Authority (ESMA) is likely to play an active role in the coordination of European national regulators' investigations and interventions under MAR.

In addition, the ruling of the European Court of Human Rights (the Court) in Grande Stevens and Others v. Italy (4 March 2014) has already had an impact in France, and is likely to affect other jurisdictions which are signatories to Protocol 7 of the of the European Convention on Human Rights, 1950 (ECHR). Article 4 of that Protocol prohibits criminal proceedings being brought against an individual where that person has already been acquitted or convicted of the same offence in that jurisdiction. Italy sought to bring a criminal prosecution for market manipulation against a person in respect of whom the Italian regulator had taken administrative proceedings for market manipulation (market abuse offences are considered to be "criminal offences" in ECHR terms). In holding Italy in violation of Article 4, the Court confirmed that the primary consideration is whether the conduct targeted in both proceedings is essentially the same.

In producing this publication, we have drawn on the expertise of our financial services regulation practice across our international network of offices. In addition, we are enormously grateful for contributions from law firms Stibbe (Netherlands), Homburger (Switzerland), Anderson Mori & Tomotsune (Japan) and ProLegis (Singapore).

We hope you find this publication of interest. If you have any questions, please do not hesitate to contact us or any of our colleagues listed at the end of each chapter.

Karen AndersonPartner, financial services regulatory, Herbert Smith Freehills LLPAugust 2015

*References to "Dubai" in this preface are intended to be references to the Dubai International Financial Centre, a financial free zone located within the Emirate of Dubai. The remainder of the Emirate of Dubai is subject to separate laws and regulations that are outside the scope of this publication.

THE LONG ARM OF REGULATION:



Karen AndersonLondonT +44 20 7466 [email protected]

Scott BalberNew YorkT +1 917 542 [email protected]

Tony CoburnMelbourneT +61 3 9288 [email protected]

Susannah CogmanLondonT +44 20 7466 [email protected]

Andrew EastwoodSydneyT +61 2 9225 [email protected]

Ignacio Echenagusia MadridT +34 91 423 [email protected]

Matt EmsleyHong KongT +852 [email protected]

David Gilmore TokyoT +81 3 5412 [email protected]

Peter Godwin TokyoT +81 3 5412 [email protected]

William HallattHong KongT +852 [email protected]

Cameron HansonSydneyT +61 2 9225 [email protected]

Luke HastingsSydneyT +61 2 9225 [email protected]

Brenda Horrigan ShanghaiT +86 21 2322 [email protected]

Hywel JenkinsLondonT +44 20 7466 [email protected]

Nanda Lau ShanghaiT +86 21 2322 [email protected]

Kai LiebrichFrankfurtT +49 69 2222 [email protected]

Patrick Lowden SydneyT +61 2 9225 [email protected]

Elizabeth MacknayPerthT +61 8 9211 [email protected]

Nicolas Martin MadridT +34 91 423 [email protected]

Jonathan Mattout ParisT +33 1 53 57 65 [email protected]

Vladimir MelnikovMoscowT +7 4953 63 65 [email protected]

John O’Donnell New YorkT +1 917 542 [email protected]

Stuart PatersonDubaiT +971 4 428 [email protected]

Hugh Paynter SydneyT +61 2 9225 [email protected]

Elizabeth PoulosBrisbaneT +61 7 3258 [email protected]

Andrew Procter LondonT +44 20 7466 [email protected]

Hubert SegainParisT +33 1 53 57 78 [email protected]

John Siu Hong KongT +852 [email protected]

Siddhartha SivaramakrishnanSingaporeT +65 [email protected]

Fiona Smedley SydneyT +61 2 9225 [email protected]

Eduardo Soler Tappa MadridT +34 91 423 [email protected]

Jenny StainsbyLondonT +44 20 7466 [email protected]

Michael VrisakisSydneyT +61 2 9322 [email protected]

Kyle WomboltHong KongT +852 [email protected]

Mathias WittinghoferFrankfurtT +49 69 2222 [email protected]

Tomasz WozniakMoscowT +7 495 78 [email protected]

Evgeny Zelensky MoscowT +7 495 78 [email protected]

HERBERT SMITH FREEHILLS GLOBAL CONTACTS

HERBERT SMITH FREEHILLS40

JAPA

N

01. National measures enabling the domestic financial services regulator/s to comply with requests for assistance from overseas regulatorsCan the national regulator appoint an investigator to investigate an issue in your jurisdiction, at the request of an overseas regulator?

Yes.

The Financial Services Agency of Japan (FSA) may appoint members of its staff to investigate an issue following a request for cooperation in an administrative investigation, by a foreign authority responsible for the enforcement of laws and regulations corresponding to the Financial Instruments and Exchange Act of Japan (Article 189(1) Act No.103 of 1948, as amended (FIEA)). This is provided that the FSA deems it appropriate.

Also see paragraph 5 Annex 1 for information generally on the FSA's obligation to cooperate pursuant to the IOSCO Multilateral Memorandum of Understanding concerning consultation and cooperation and the exchange of information (IOSCO MMOU), to which Japan is signatory.

Can the national regulator obtain information/documents where they are located in your jurisdiction, at the request of an overseas regulator?

Yes.

The FSA may, at the request of an overseas regulator, order the submission of reports or materials to be provided to the FSA that will be helpful to the extent necessary and appropriate for responding to the request (Article 189(1) FIEA).

Further, where the FSA deems it necessary and appropriate in the public interest or for the protection of investors, it can also obtain information/documents from certain firms/individuals pursuant to other statutory powers (see below).

Who can be required to provide information/documents in these circumstances?The FSA may order the following persons (known as "Concerned Parties") to submit reports or materials (Article 189(1) FIEA):

persons who conduct sales and purchases of securities, or other securities transactions or derivative transactions, with a person residing in the requesting foreign state; and/or

other persons concerned or witnesses.

This can be any person in Japan.

Further, when the FSA deems it necessary and appropriate in the public interest or for the protection of investors, it can obtain information/documents from:

financial institutions supervised by the FSA (Article 24 Banking Act, Article 56-2(1) FIEA);

holding companies of financial institutions (Article 52-31 Banking Act, Article 56-2(1) FIEA);

major shareholders (ie, persons holding voting rights exceeding 20 per cent, or 15 per cent if they may have a material influence on decisions concerning financial and operational policy) of financial institutions (Article 52-11 Banking Act, Article 56-2(2) FIEA); and/or

companies listed on stock exchanges in Japan (Article 24 FIEA, etc).

Can the national regulator compel people located in your jurisdiction to attend interviews and answer questions, at the request of an overseas regulator?

Yes.

Who can be required to attend interviews and answer questions?Any person in Japan may be required to attend interviews and answer questions, provided they are a Concerned Party (Article 189(1) FIEA).

Can the overseas regulator attend the interview?Yes.

An overseas regulator cannot attend an interview conducted by the FSA in Japan in order to ask questions, as this may be deemed to infringe Japan's sovereignty. However, it may be possible for the overseas regulator to attend an interview as an observer, should the FSA approve this (as permitted by the IOSCO MMOU, see paragraph 5 Annex 1).

Can the national regulator change or cancel a firm's permission to carry out financial services activities in your jurisdiction, at the request of an overseas regulator?

No.

JAPANANDERSON MORI & TOMOTSUNE IN CONJUNCTION WITH HERBERT SMITH FREEHILLS

JAPAN

41

JAPA

NRESPONDING TO CROSS-BORDER FINANCIAL SERVICES INVESTIGATIONS

However, if the FSA receives evidence from an overseas regulator that a firm has acted illegally, and the FSA finds that the firm is violating or operating inappropriately in accordance with Japanese laws/regulations, it has the discretionary power to change or cancel the firm's permission to carry out financial services activities.

02. Compliance with the overseas regulator's request for assistanceIs the national regulator obliged to comply with a request from an overseas regulator?

No.

The FSA has no legal obligation to comply with a request from an overseas regulator.

If compliance with the request is discretionary, what factors will the national regulator consider when deciding whether to comply with a request?

The FSA will have regard to the principles contained in the IOSCO MMOU (see paragraph 5 Annex 1).

Are there specific grounds on which the national regulator must refuse to comply with the request?

Yes.

There are three specific grounds:

the overseas regulator has not agreed to provide reciprocal assistance;

there is a risk that the investigation will have an adverse material impact on Japan's capital markets or that the national interests of Japan will be impaired; and/or

there is a risk that the report or materials submitted in the investigation will be used by the overseas regulator for a purpose other than assisting it to execute its duties.

03. Sharing information with overseas regulatorsWhat information can the national regulator share with the overseas regulator?

The FSA may share any information, including information obtained through its information gathering powers (Article 189(1) FIEA and other statutory powers). This includes copies of customer ledgers that financial institutions submit to the FSA.

Are there any restrictions on how the receiving regulator can use the transmitted information?

Yes.

The FSA is required to take appropriate measures to ensure that the transmitted information is not used for criminal proceedings conducted by courts in the foreign state (Article 189(4) FIEA). Also see the restrictions contained in the IOSCO MMOU detailed at paragraph 5 Annex 1.

Is the national regulator obliged to notify the firm before it shares the information?

No.

The FSA is not under any legal obligation to notify the firm before it shares information with the overseas regulator.

Are there any grounds on which a firm or individual can object to the national regulator providing information to overseas regulators?

In practice it would be difficult to persuade the FSA not to share information with its overseas counterparts. This being the case, if a firm or individual were to be aware of an information request from an overseas regulator, although the chances of successfully objecting are slim, the firm could theoretically object on the grounds stated in Question 2.

Further, if the overseas regulator is not subject to equivalent protections regarding the obligation to preserve secrecy under the National Public Service Act (Article 100 Act No.120 of 1947, as amended), this may also theoretically provide a basis on which a firm/individual could attempt to object. As with the above however, the probability of making a successful objection is low.

04. Direct requests by overseas regulators to firmsAre there any mechanisms which enable an overseas regulator to request information directly from firms in your jurisdiction?

No.

However, firms may submit information directly to an overseas regulator on a voluntary basis, should a direct request be made.

Is there a mechanism for enforcing such requests?

Not applicable.

05. In what circumstances can a firm/individual withhold information/evidence from a regulator on the basis of:Legal privilege

The concept of legal privilege does not exist under Japanese law. A person who receives a request from the FSA must, in practice, disclose any and all requested information that it holds.

Confidentiality

Confidentiality does not provide a basis for declining to produce material to the FSA.

Privilege against self-incrimination

Under the Constitution of Japan, no person shall be compelled to testify against himself/herself (Article 38(1)). Such privilege against self-incrimination is not explicitly applicable in regulatory proceedings, however it may be operative where a criminal investigation may be involved.

Other

No.

06. Are there any national measures in place which restrict the export of personal data held by firms, to regulators in overseas jurisdictions?

No.

In Japan, the Personal Information Protection Law (Act No. 57 of 2003) strictly regulates how firms/individuals acquire, manage and hold personal data. However, the law is silent in relation to transferring personal data to foreign countries. Unlike the EU Data Protection Directive (95/46/EC), the law does not explicitly prohibit exporting personal data to certain jurisdictions where the receiving country does not provide an adequate level of protection.


JAPA

N

07. What are the consequences for firms/individuals of not complying with the national regulator's request for information, documents, attendance at interviews and answers to questions?

If a person:

fails to submit a report or materials, or submits a false report or false materials under Article 189(1) FIEA; or

fails to attend interviews and answer questions posed by the FSA,

they may be punished with an administrative fine of not more than JPY100,000 (Article 209, item 9 FIEA).

If a person fails to cooperate with the FSA in an administrative investigation conducted pursuant to a statute relating to a financial institution (including, without limitation, the Banking Act and FIEA), they may be subject to criminal penalties. For example, if a securities broker fails to cooperate, the staff responsible for the failure of the broker may be punished by imprisonment with work, for not more than one year, or by a fine of not more than JPY3 million or both (Article 198-6, item 10 and 11 FIEA). Moreover, the securities broker itself, as the responsible entity, can be punished by a fine of not more than JPY200 million and may have its registration rescinded by the FSA.

08. What agreements are in place for the national regulator to request the cooperation of overseas regulators in domestic matters?Cooperation in regulatory/administrative mattersBilateral agreements:The FSA has entered into seven Memoranda of Understanding (MOUs) on the sharing of information on securities matters with the following overseas financial services regulators:

China Securities Regulatory Commission;

Monetary Authority of Singapore (MAS);

US Securities and Exchange Commission;

US Commodity Futures Trading Commission;

Australian Securities and Investments Commission;

Hong Kong Securities and Futures Commission (SFC); and

Financial Markets Authority of New Zealand.

Multilateral agreements:See Annex 2.

Cooperation in criminal mattersDomestic mechanisms:The Law for International Assistance in Investigation and Other Related Matters (Act No.69 of 1980), prescribes the permitted manner of cooperation with overseas regulators in certain circumstances in criminal matters.

Bilateral agreements:Japan has entered into six mutual legal assistance treaties with overseas regulators in the following jurisdictions: the US, South Korea, China, Hong Kong, Russia, and the EU.

Multilateral agreements:See Annex 3.

Do regulators or prosecuting authorities have powers to request the arrest and extradition of suspects located in overseas jurisdictions, from overseas authorities?Prosecuting authorities have the power to request the extradition of suspects located in the US and South Korea, with which Japan has extradition treaties.

Under the doctrine known as "comity of nations", prosecuting authorities also have the power to request the extradition of suspects located in countries that Japan has not entered into specific treaties with. Such countries may also agree to extradite suspects on a voluntary basis.

09. Are there any domestic judicial decisions regarding the cooperation of overseas and domestic regulators?

No.

10. Can the national authorities take regulatory and/or criminal action against a firm or individual in circumstances where an overseas authority has taken action against that firm or individual for the same offence?

Yes.

The FSA can take administrative action against a firm/individual where they have already been subject to administrative action for the same conduct by an overseas regulator. Where a final and binding decision has been issued by a foreign judiciary with respect to criminal conduct, Japanese courts are permitted to sentence the same individual for the same criminal conduct, to further punishment in Japan. However, when the accused has already served the whole or part of the punishment abroad, the court shall take this into consideration and may reduce the punishment in Japan depending on the circumstances of each case (Article 5 Criminal Code, Act No. 45 of 1907). Although the Constitution of Japan provides that no person shall be placed in double jeopardy in criminal procedures (Article 39), this Article would be interpreted as being applicable only to criminal acts which have already been definitively adjudicated under Japanese criminal proceedings.

11. What are the trends in relation to the regulator initiating or responding to cross-border investigations?

The Securities and Exchange Surveillance Committee (SESC) (the principal national investigator in financial services matters) has prioritised taking action in cross-border market abuse cases in recent years. For example in 2004, the FSA and the SESC alerted the MAS as to suspected insider trading conducted by persons resident in Singapore in relation to a Japanese listed stock. This resulted in the MAS taking enforcement action against three employees of the Government of Singapore Investment Corporation Pte Ltd for breaches of the insider trading provisions under Singapore's Securities and Futures Act. In another case, the SESC alerted the UK Financial Services Authority (UK FSA) as to insider trading in the UK regarding a Japanese listed stock. This resulted in the UK regulator fining the hedge fund manager GLG Partners LP and a former managing director of the firm £750,000 each for market abuse (1 August 2006). More recently, the SESC received the assistance and cooperation of the Hong Kong SFC in a case involving a hedge fund managed by Areion Asset Management Company Limited (a company incorporated in Hong Kong), which had engaged in market manipulation activities in Japan in relation to Japanese listed securities. The SESC

43

JAPA

NRESPONDING TO CROSS-BORDER FINANCIAL SERVICES INVESTIGATIONS

recommended, on 5 December 2014, that the Prime Minister and the Commissioner of the FSA impose on the offender an administrative monetary penalty of JPY430,740,000, and such recommendation is currently being considered. The penalty amount of JPY430,740,000 is the highest that the SESC has ever recommended.

The Office of Investigation of International Transactions and Related Issues, established within the SESC in 2009, has also received the assistance and cooperation of the UK Financial Conduct Authority (the successor regulator to the UK FSA, together with the Prudential Regulation Authority).

The SESC continues to proactively support foreign authorities (such as through the provision of information regarding problematic transactions) to facilitate investigations of foreign investors who have acted improperly in the Japanese market, and in the punishment of foreign investors under the laws of the foreign countries. Similarly, cases in which the SESC receives support from foreign authorities based on the MOUs have been gaining increasing significance. The cooperation afforded by foreign authorities has, in several cases, enabled the FSA to impose the appropriate sanctions on the perpetrators based on the recommendations of the SESC. For example, there has been cooperation in cases where foreign investors (such as First New York Securities LLC) have been accused of unfair trading (such as insider trading) in the Japanese market in violation of Japanese law. Further, there has been cooperation in the SESC's investigation of certain financial institutions (such as AIJ Investment Advisors Co Ltd) which were supposed to manage certain investments outside of Japan on behalf of Japanese investors, but had instead used the funds received from Japanese investors improperly. In those cases, foreign authorities had provided to the SESC information regarding problematic transactions (such as information on bank accounts opened outside Japan by the financial institutions under investigation by the SESC) and these financial institutions investigated by the SESC had turned out to be Ponzi schemes which had caused huge losses to Japanese investors.

12. Are there any proposals to change the national regulators' powers to assist overseas regulators? If so, how, and what impact will those reforms have on firms or individuals?

No.

The SESC has expressed willingness to continue its cooperation with foreign regulators in response to the globalisation of financial markets.

13. In relation to domestic investigations instigated by the national regulator, what powers does the regulator have to compel: the production of information/documents from firms/individuals where they are located in an overseas subsidiary or related company?

The FSA does not have the power to compel firms/individuals to produce information/documents where they are located in an overseas subsidiary or related company. It can however request firms/individuals to cooperate with such requests on a voluntary basis.

Anderson Mori & Tomotsune

Atsutoshi Maeda and Takehiro Shibuya

Akasaka K-Tower, 2-7, Motoakasaka 1-chome, Minato-ku Tokyo 107-0051, Japan

Atsutoshi Maeda T +81 3 6888 1083 F +81 3 6888 3083 [email protected]

Takehiro Shibuya T +81 3 6888 1154 F +81 3 6888 3154 [email protected]

www.amt-law.com

Anderson Mori & Tomotsune, one of the largest and most diversified full-service law firms in Japan with approximately 360 bilingual lawyers, was formed from the merger of two of Japan’s leading firms, Anderson Mori and Tomotsune & Kimura. Since the origin of its predecessors in 1952, the firm has historically represented multinational, overseas corporations. Supplementing its Tokyo main office, it also operates offices in Beijing, Shanghai, Singapore, Vietnam and Nagoya to meet the needs of clients engaging in business in Asia.

Herbert Smith Freehills

Peter Godwin and David Gilmore

T +81 3 5412 5412 F +81 3 5412 5413 [email protected] [email protected]

www.herbertsmithfreehills.com

Herbert Smith Freehills is consistently recognised as a leading law firm in Japan and is one of the largest foreign law firms in the country. The corporate team is among the most experienced in Tokyo and many of its members are fluent in written and spoken Japanese. We provide top quality and commercially aware legal advice to both Japanese and foreign enterprises based on our familiarity with Japan and our broad experience of international transactions. For a more detailed description of the practice please refer to www.herbertsmithfreehills.com/locations/tokyo.


AN

NE

XES

01. Cooperation and information sharing in regulatory/administrative matters between regulators in EEA Member StatesObligation to cooperate

Financial services regulators in EEA Member States1 are required to cooperate with each other wherever necessary for the purpose of carrying out their duties, or exercising their powers, under the Markets in Financial Instruments Directive (2004/39/EC) (MiFID), or national law (Article 56, MiFID). This includes exchanging information and cooperating in investigations (even where the conduct does not constitute a breach of law/regulation in that Member State) and supervisory work. Where a regulator has good reason to suspect that a breach of MiFID has taken place by an entity in another Member State that is not subject to its supervision, it is obliged to notify the relevant regulator, whereupon that regulator is obliged to take action.

Where a regulator receives a request for assistance in an investigation or "on-the-spot verification", the regulator has a choice as to whether it carries out the investigation or verification itself, or allows the requesting regulator, auditors or experts, to do so (Article 57, MiFID).

Direct requests on firms

Regulators in EEA Member States are entitled to make direct requests for cooperation on investment firms that are remote members of that regulator's regulated market (Article 57, MiFID). In this situation, the regulator must inform the regulator in the home Member State of the request. The scope of direct approaches to remote investment firms may relate to supervisory matters or market abuse enquiries in relation to the activities of those remote members on those markets (CESR Guidance 09/697). This mechanism does not extend to direct requests on individuals (subject to national law).

Article 57 is not directly applicable as law in Member States. As such, it does not create a legal obligation on investment firms that are remote members of a regulated market in another EEA Member State to respond to direct requests from the regulator in that jurisdiction. Nor is there a mechanism within MiFID that enables regulators to enforce such direct requests. However, there may be requirements imposed at the domestic level that require investment firms to cooperate with overseas regulators, which may encompass complying with direct requests. Please refer to the section on upcoming changes below for more information on how this regime is going to change in the next years.

Information sharing between regulators

Where the requested regulator already possesses the information sought, the regulator must share it with the requesting regulator without delay. Otherwise, the regulator must immediately take the necessary steps to obtain the required information and immediately provide it.

Restrictions

Regulators may stipulate that the recipient regulator should not disclose the information without the express agreement of the regulator providing the information. This means that information may be exchanged exclusively for the purpose for which the regulator gives its agreement (Article 58, paragraph 1, MiFID).

Regulators are not entitled to transmit information to entities which are not regulators designated as "competent authorities", without the express agreement of the transmitting regulator, except in "duly justified circumstances" (Article 58, paragraph 2, MiFID). This means that a regulator cannot send information to, for example, a competition regulator, in another Member State, unless there are justified circumstances. This proviso gives regulators discretion to share information with a wide range of authorities in other Member States.

Where regulators receive confidential information, unless the transmitting regulator agrees otherwise, they may only use that information in the course of their duties, including to: ensure licensing conditions are satisfied, monitor the conduct of firms particularly with regard to capital adequacy requirements and internal controls, and impose sanctions (Article 54, paragraph 4, MiFID). These restrictions do not prevent regulators, in their capacity as monetary authorities, from transmitting confidential information to central banks, the European System of Central Banks (ESCB) and the European Central Bank (ECB), or other bodies responsible for payment and settlement systems (Article 58, paragraph 5, MiFID).

A regulator may only refuse to cooperate or exchange information where:

the investigation, supervisory activity or "on-the-spot verification" may have an adverse effect on the sovereignty, security or public policy of the requested state; or

judicial proceedings have commenced, or a final judgment has been delivered, against a firm or individual in respect of the same conduct in the requested state.

Upcoming changes

MiFID II (2014/65/EU) and the Markets in Financial Instruments Regulation (Regulation 600/2014) (MiFIR) will repeal and recast MiFID. They will come into effect on 3 January 2017. Implementation of MiFID II/MiFIR will significantly impact both the structure and operation of EU financial markets and provide increased protection for investors. The MiFID cooperation and information sharing requirements described above have been, generally speaking, largely copied over into MiFID II. MiFID II envisages that national competent authorities:

may ask ESMA to mediate in cases where a request for assistance has been rejected or has not been acted upon within a reasonable time, and to use its powers under the Regulation establishing the European Securities and Markets Authority (Regulation 1095/2010) (ESMA Regulation) to reach a settlement (failing which ESMA could address requests directly to firms);

ANNEX 1


AN

NE

XES

will cooperate with ESMA for the purposes of the Directive, in accordance with the ESMA Regulation and provide ESMA, without undue delay, with all information necessary to carry out its duties under MiFID II and MiFIR, in accordance with Articles 35 and 36 of the ESMA Regulation.

Although MiFID II as a Directive will not have direct effect in Member States and therefore needs to be implemented through national legislation, ESMA's own powers are conferred by Regulation.

The new Market Abuse Regulation (Regulation 596/2014) (MAR) also imposes duties on the relevant regulators to cooperate with and render assistance to each other and with ESMA as necessary for the purposes of MAR once it comes into application in July 2016. ESMA is drafting implementing technical standards which (once enacted) will determine the procedures and forms for exchange of information and assistance required by MAR. MAR also provides that ESMA may, if requested to do so by one of the competent authorities, coordinate investigations or inspections with cross-border effect.

02. Cooperation and information sharing in regulatory/administrative matters sharing between regulators in EEA Member States and non-EEA Member States

Regulators in EEA Member State jurisdictions are entitled to enter into cooperation agreements with regulators in non-EEA jurisdictions, including those responsible for the supervision of credit institutions and the liquidation/bankruptcy and statutory auditing of investment firms (Article 63 MiFID). Indeed this is the norm in practice. This is provided that the information to be disclosed is subject to at least the same standard of confidentiality provided for in MiFID and the exchange of information is pursuant to the performance of the functions of the authorities.

03. Cooperation in criminal matters between regulators in EEA Member StatesEuropean convention on mutual assistance in criminal matters

The European Convention on mutual assistance in criminal matters (2000) lays down the conditions under which mutual assistance in criminal matters may be granted by authorities of EEA Member States. As a general rule, requests for mutual assistance and communications are made directly between judicial authorities, and must be executed as soon as possible. A judicial authority or a central authority in one Member State may make direct contact with police authorities or, in respect of requests for mutual assistance in relation to proceedings, with an administrative authority, for example regulators, from another Member State. Authorities may also establish joint investigation teams, where for example there are a number of Member States conducting an investigation where the circumstances necessitate coordinated action. The exchange of information without prior request may take place if the matter falls within the competence of the receiving authority.

The Convention permits the interception of telecommunications in one Member State, at the request of a competent authority from another Member State. However, Member States will consider such requests in accordance with their own national law and procedures.

A Member State which has obtained personal data under the Convention may use them only for:

judicial or administrative proceedings covered by Convention;

preventing an immediate and serious threat to public security; or

any other purpose, with the prior consent of the communicating Member State or of the data subject.

The communicating Member State may ask the Member State to which the personal data has been transferred to give information on the use made of the data.

Arrests and extradition

The European Arrest Warrant (EAW) is available to police and prosecutors in EU Member States and is now widely used to secure the arrest and surrender of suspected criminals.

The Framework Decision to establish the EAW entered into force on 1 January 2004 and sought to replace extradition proceedings between Member States, speed up and remove any political dimension affecting the transfer of suspected criminals. The EAW can be used to secure the arrest and surrender of an individual for the purpose of conducting a criminal prosecution, or executing a custodial sentence or detention order. The EAW applies in relation to any offence punishable under the law of the requesting state by at least 12 months' imprisonment or, where there has already been a conviction, a sentence of at least four months has been imposed. The requesting state does not have to demonstrate that there is a case to answer. The merits of the request are taken on trust and there are limited mandatory and discretionary grounds for refusing enforcement (the person has already been finally judged by another Member State). Where the arrested person does not consent to surrender, they are entitled to a hearing in accordance with the law of the executing Member State.

04. Principle against double jeopardy

Given the growth of cross-border financial services, firms are increasingly subject to investigation and ultimate sanction by regulators in different jurisdictions. This makes the question of whether regulators can bring proceedings in relation to the same conduct in multiple jurisdictions an important one.

Of the jurisdictions covered in this publication, France, Germany, the Netherlands, Spain and Switzerland are signatories to the Convention implementing the Schengen Agreement (1990). Although the UK is not party, it has opted to participate in certain aspects of the convention, including provisions relevant to the rule against double jeopardy. In jurisdictions which are signatory to the Schengen Convention, regulators are prevented from bringing criminal proceedings against a firm or individual where that firm or individual has been tried and convicted, or acquitted, of the same offence in another contracting country, but only when, if a penalty has been imposed, it has been enforced, is being enforced or can no longer be enforced (Article 54). This principle does not prevent conflicts in jurisdiction while simultaneous prosecutions are ongoing in more than one Member State (but where no conviction has yet been secured).

This provision, however, is subject to potential reservations made by signatory jurisdictions limiting its scope of application2. Furthermore, the provision does not extend beyond criminal cases, so it does not prevent duplicate enforcement/administrative proceedings from being instigated.


AN

NE

XES

In the MTS case the Belgian authorities concluded that they were prevented from taking enforcement action by Article 54 of the Schengen Convention because the UK's regulator had already imposed a sanction dealing with, inter alia, transactions on the Belgian market. Regulators in Italy and Portugal, on the other hand, did not consider themselves similarly constrained and imposed their own sanctions.

Regulators in most EEA Member States are also bound by Article 4 of Protocol 73 of the European Convention on Human Rights (1950), which prevents criminal proceedings being brought against an individual where that person has already been acquitted or convicted of the same offence in that jurisdiction. Regulators may however seek to reopen criminal cases if there is evidence of new facts, or if there was a fundamental defect in the previous proceedings, which could affect the outcome of the case.

The Charter of Fundamental Rights of the European Union (2000) also provides that no one shall be liable to be tried or punished again in criminal proceedings for an offence for which he or she has already been finally acquitted or convicted within the EU (Article 50). The charter became binding in 20094.

In the Zoran Spasic case5, the Court of Justice of the European Union (CJEU) considered whether Article 54 of the Schengen Convention complied with Article 50 of the Charter, holding that:

the additional "enforcement condition" set forth in the Schengen Convention did not infringe the principle against double jeopardy as provided in Article 50 of the Charter, and

in cases where a court has imposed a penalty consisting of imprisonment and a fine, payment of the fine does not alone establish that the penalty is in the process of being enforced to satisfy the enforcement condition set forth in the Schengen Convention and therefore enable the principle against double jeopardy to be relied on.

Although they relate to the issue of successive domestic regulatory and criminal prosecutions of insider dealing offences), the decisions of the European Court of Human Rights (ECHR) in the Grande Stevens decision6 and of the French Constitutional Council ruling in the EADS case handed down on 18 March 20157 are also noteworthy.

In the Grande Stevens case, the ECHR found that Italy, which permits both regulatory and criminal prosecution for market abuse, violated Article 4 of Protocol 7 as it permitted the same person to be prosecuted twice for the same misconduct (in this case, market manipulation), first by the regulator and then by the prosecutor. In doing so, the ECHR confirmed that the main criteria to consider in assessing whether the double jeopardy principle has been infringed is whether the conduct targeted in both proceedings is essentially the same.

In March 2015, the French Constitutional Council considered (by way of a preliminary ruling on constitutionality) whether, inter alia, the provisions of the French Monetary and Financial Code (CMF) enabling successive prosecution of insider dealing by the Autorité des Marchés Financiers (AMF) (regulatory proceedings) and by the Public Prosecutor (criminal proceedings) breached the principle against double jeopardy and the principle of necessity and proportionality of criminal sanctions enshrined in the French Declaration of Human Rights.

In its decision, the French Constitutional Council stated that that the existence of a dual system to punish the same conduct will only violate the French Declaration of Human Rights if the regulatory and criminal prosecutions, cumulatively:

have a similar scope of application (in terms of the conduct and the persons targeted);

protect the same social interest;

lead potentially to sanctions of a similar nature (in terms of both the severity of the sanction and the elements taken into account in its evaluation); and

are to be decided upon within the same domestic jurisdiction (either judicial or administrative).

The Constitutional Council ruled that in the particular case (which related specifically to insider dealing) these four cumulative criteria were met. It therefore considered that the successive prosecutions violated the principle of necessity enshrined in the Declaration of Human Rights.

As a consequence, the Constitutional Council decided:

to repeal several provisions of the CMF related to insider dealing, effective on 1 September 2016 (allowing the legislator some time to change the law), and

that, from the publication of the 18 March 2015 decision, no criminal prosecution will be possible where enforcement proceedings have already been initiated by the AMF Sanctions Committee on the basis of the same facts and against the same person, and vice-versa.

On 20 May 2015, the French Supreme Court applied the Constitutional Council's ruling in another insider dealing case, quashing a Paris Court of Appeal decision which had found an individual guilty of insider trading (criminal offence) after the same individual had been found to have engaged in insider trading (regulatory offence) by the AMF Sanctions Committee.8

It will be interesting to see how the French legislators approach the recasting of the AMF enforcement regime. A bill reforming the regime is expected to be debated in Parliament next autumn, with a view to a law being passed in 2016.

05. IOSCO Multilateral Memorandum of Understanding concerning consultation and cooperation and the exchange of information

Regulators from all of the jurisdictions surveyed in this publication are signatories to the IOSCO Multilateral Memorandum of Understanding concerning consultation and cooperation and the exchange of information (IOSCO MMOU).9 In Hong Kong only the SFC (not the HKMA) is a signatory to the IOSCO MMOU.

The MMOU sets out how signatory regulators are required to consult, cooperate, and exchange information for securities regulatory enforcement purposes. The IOSCO MMOU also sets out the signatories' intent with regard to mutual assistance and exchange of information, but is not intended to create legally binding obligations or supersede domestic laws (paragraph 6(a) of the IOSCO MMOU).


AN

NE

XES

Scope of cooperation

Information requests can be made when authorities are in the process of investigating offences relating to the following activities under the various jurisdictions relevant laws and regulations:

insider dealing and market manipulation;

misrepresentation of material information and other fraudulent or manipulative practices relating to securities and derivatives;

solicitation and handling of investor funds, and customer orders;

the registration, issuance, offer, or sale of securities and derivatives;

the activities of market intermediaries, including investment and trading advisers who are required to be licensed or registered, collective investment schemes, brokers, dealers, and transfer agents; and

markets, exchanges, and clearing and settlement entities.

Regulators must provide the fullest assistance permissible to each other. This includes:

providing information/documents within the possession of the requested regulator;

obtaining information/documents, from any regulated person, or person who may possess the information /documents, including:

contemporaneous records sufficient to reconstruct all securities and derivatives transactions; and

records that identify, for example the beneficial owner and controller of transaction, account holders and details of the transaction; and

taking or compelling witness evidence from any person involved directly or indirectly in the activities subject to the request, or who is in possession of information which may assist in the request. A representative of the requesting regulator may be present during the interview and may provide specific questions to be asked.

Firms/individuals may not necessarily be aware that a request for information emanates from an overseas regulators' request made pursuant the IOSCO MMOU, given that regulators are obliged to keep requests confidential. This is unless disclosure is required to carry out the request, after consultation with the requesting regulator.

Even where there is no prior request, regulators must use reasonable efforts to provide information that is likely to be of assistance in securing compliance with laws/regulations.

In addition to the cooperation arrangements under the MMOU, IOSCO encourages regulators to consider having internal protocols for collaborating with other regulatory agencies. The IOSCO Joint and Parallel Investigations Guide provides a template. IOSCO envisages that such protocols may particularise the practical procedures for collaboration on cross border investigations, eg, establishing regulatory colleges to consider, where appropriate, enforcement objectives, information sharing, actions, timescales, prosecutions and settlements. In addition, when embarking on a joint or parallel investigation, regulators are urged to consider arrangements that address the extraterritorial impact of domestic enforcement, regulatory and legislative

developments on other jurisdictions: for instance, a prosecution of misconduct in one jurisdiction may raise constitutional and/or legal issues, such as double jeopardy, in another; or the compulsion of testimony in one jurisdiction may affect the use that may be made of that testimony in another jurisdiction.

Refusal to cooperate

Requests may be denied:

where the request would require the requested regulator to act in a manner that would violate domestic law;

where criminal proceedings have already been initiated, or final sanctions have been imposed, in the jurisdiction of the requested regulator, where it is based on the same facts and charges, against the same persons. This is unless the requesting regulator can demonstrate that the relief or sanctions sought would not be of the same nature or duplicative. There is nothing in the MMOU which prevents duplicative administrative or regulatory proceedings from being sought;

on the grounds of public interest or national interest; or

where the request is not made in accordance with the terms of the MMOU.

Assistance cannot be denied on the basis that the conduct in question does not breach the laws or regulations of the requested authority.

Use of information

Transmitted information may only be used for the purposes set out in the request for assistance, including ensuring compliance with the laws/regulations relating to the request, unless the requested regulator consents otherwise. Regulators cannot disclose non-public information or documents received pursuant to the MMOU, except for the purposes set out in the request for assistance, or in response to a legal obligation.

06. Restrictions on the disclosure of personal information to regulators in EEA Member States

In 1995, the Data Protection Directive (95/46/EC) introduced an extensive data protection regime which applies across the EEA by imposing broad obligations on those who collect personal data ("data controllers"), as well as conferring broad rights on individuals about whom data is collected ("data subjects"). The Directive applies to data controllers in the EEA, and to those established outside of the region if they use equipment located in a Member State for the purposes of processing personal data

In accordance with the Directive, there must be no national measures in Member States which would restrict firms in these jurisdictions from exporting personal data to regulators in the EEA. The Directive prohibits the transfer of personal data outside of the EEA, unless the country to which the personal data is being transferred offers an adequate level of protection, or one of a number of specified conditions is satisfied, including that the proposed transfer:

has been unambiguously consented to by the data subject;

is necessary for: the performance of a contract between the data subject and the controller; or the protection of the vital interests of the data subject;


AN

NE

XES

is legally required on important public interest grounds; or

is made from a register which is intended to provide information to the public and which is open to consultation.

In January 2012, the European Commission published a draft General Data Protection Regulation (GDPR), proposed to replace the existing regime set out in the Data Protection Directive. The proposal, which represents a significant overhaul of the regime under the Data Protection Directive, aims to harmonise data protection procedures and enforcement across the EU. The Council of the European Union agreed a general approach in June 2015, paving the way for trilogue negotiations to commence between the European institutions to agree a final version of the new GDPR; it is envisaged that final agreement will be reached by the end of 2015, with the GDPR coming into effect toward the end of 2017.

1. Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom, Iceland, Norway and Liechtenstein.

2. France has made such reservations; see Question 10 of the French chapter in this Guide.

3. The UK had not signed or ratified Protocol 7 of the ECHR as at 11 August 2015.4. Whether the charter is applicable in Poland and the UK as a result of Protocol 30

to the Lisbon Treaty relating to the charter, which some commentators have viewed as an opt-out to the application of the charter in national law, has been a matter of debate. However, in April 2014, a UK House of Commons European Scrutiny Report concluded that Protocol 30 is not an opt-out and that the charter is "directly effective in the UK". The report also strongly supported the application of the charter in Poland (see http://www.publications.parliament.uk/pa/cm201314/cmselect/cmeuleg/979/979.pdf).

5. CJEU (Grand Chamber) Zoran Spasic (C-129/14 – PPU), 27 May 2014.6. ECHR Case Grande Stevens and Others v. Italy, 4 March 2014.7. French Constitutional Council Decision n°2014-453/454, 18 March 2015.8. Decision of the French Supreme Court, Criminal section, 20 May 2015, n°

13-83.489.9. A full list of signatories is available at https://www.iosco.org/about/?subSection

=mmou&subSection1=signatories.

ENDNOTES


AN

NE

XES

01. COOPERATION IN ADMINISTRATIVE/DISCIPLINARY MATTERS

AUSTRALIA CHINA DIFC FRANCE GERMANY HONG KONG

Committee of European Securities Regulators Multilateral Memorandum of Understanding on the exchange of information and surveillance of securities activities (1999)?

Memorandum of Understanding on cooperation between the financial supervisory authorities, central banks and finance ministers of the European Union on cross-border financial stability (2008)?

IOSCO Multilateral Memorandum of Understanding concerning consultation and cooperation and the exchange of information (Revised 2012)?

(ASIC)

(SFC)

International Association of Insurance Supervisors Multilateral Memorandum of Understanding on cooperation and information exchange (Revised 2014)?1

(APRA)

(Office of the

Commissioner of Insurance)

Hague Convention on the taking of evidence abroad in civil or commercial matters (1970)?

ANNEX 2

1. Note that the Insurance Directives also contain specific provisions on information exchange which apply between EEA Member States. Cooperation agreements may also be concluded with third countries that meet equivalent standards of confidentiality.

2. Insurance regulators in the US states of California, Connecticut, Delaware, Iowa, Maine, Michigan, Missouri, Nebraska, Pennsylvania, Virginia and Washington are signatories.

ENDNOTES


AN

NE

XES

JAPAN NETHERLANDS RUSSIA SPAIN SINGAPORE SWITZERLAND UNITED KINGDOM UNITED STATES

*

2


AN

NE

XES

1. See paragraph 3 Annex 1.2. However, Russia is party to the European Convention on Mutual Assistance in Criminal Matters (1959), which is the predecessor to the 2000 Convention.3. However, Switzerland is party to the European Convention on Mutual Assistance in Criminal Matters (1959) as amended by the Convention Implementing the Schengen Agreement

(1990), which is predecessor to the 2000 Convention.4. Note that Switzerland has concluded a bilateral agreement with the US on mutual legal assistance.5. Although the DFSA is not a signatory, the UAE is, having signed the convention on 9 December 2002 and ratified on 7 May 2007. In accordance with Federal Law No.8 of 2004,

Article 5, a Financial Free Zone (such as the DIFC) may not do anything which may lead to a contravention of any international agreement to which the UAE is a party. The DFSA will seek to comply with the terms of its agreements with Dubai Public Prosecution and to provide full cooperation and assistance as required to comply with the UAE's obligations under the Convention.

ENDNOTES

ANNEX 3

01. COOPERATION IN CRIMINAL MATTERS

AUSTRALIA CHINA DIFC FRANCE GERMANY HONG KONG

European Convention on mutual assistance in criminal matters between Member States of the European Union (2000)?1

Protocol to the above Convention regarding locating bank accounts and providing banking information in criminal investigations (2001)?

European Convention on laundering, search, seizure and confiscation of the proceeds of crime (1990)?

Agreement on mutual legal assistance between the European Union and the United States of America (2003)?

Scheme relating to mutual assistance in criminal matters (also known as the "Harare Scheme") (1990)?

The United Nations Convention against transnational organised crime (2000)?

5


AN

NE

XES

JAPAN NETHERLANDS RUSSIA SPAIN SINGAPORE SWITZERLAND UNITED KINGDOM UNITED STATES

2 3

4


NOTES

HERBERT SMITH FREEHILLS 89SECTION TITLE

SEOULHerbert Smith Freehills LLP Foreign Legal Consultant OfficeT +82 2 6321 5600F +82 2 6321 5601

SHANGHAIHerbert Smith Freehills LLP Shanghai Representative Office (UK)T +86 21 2322 2000F +86 21 2322 2322

SINGAPOREHerbert Smith Freehills LLPT +65 6868 8000F +65 6868 8001

SYDNEYHerbert Smith FreehillsT +61 2 9225 5000F +61 2 9322 4000

TOKYOHerbert Smith FreehillsT +81 3 5412 5412F +81 3 5412 5413

MADRIDHerbert Smith Freehills Spain LLPT +34 91 423 4000F +34 91 423 4001

MELBOURNEHerbert Smith FreehillsT +61 3 9288 1234F +61 3 9288 1567

MOSCOWHerbert Smith Freehills CIS LLPT +7 495 363 6500F +7 495 363 6501

NEW YORKHerbert Smith Freehills New York LLPT +1 917 542 7600F +1 917 542 7601

PARISHerbert Smith Freehills Paris LLPT +33 1 53 57 70 70F +33 1 53 57 70 80

PERTHHerbert Smith FreehillsT +61 8 9211 7777F +61 8 9211 7878

DOHAHerbert Smith Freehills Middle East LLPT +974 4429 4000F +974 4429 4001

DUBAIHerbert Smith Freehills LLPT +971 4 428 6300 F +971 4 365 3171

FRANKFURTHerbert Smith Freehills Germany LLPT +49 69 2222 82400F +49 69 2222 82499

HONG KONGHerbert Smith FreehillsT +852 2845 6639F +852 2845 9099

JAKARTAHiswara Bunjamin and TandjungHerbert Smith Freehills LLP associated firmT +62 21 574 4010F +62 21 574 4670

LONDONHerbert Smith Freehills LLPT +44 20 7374 8000F +44 20 7374 0888

BANGKOKHerbert Smith Freehills (Thailand) Ltd T +66 2657 3888F +66 2636 0657

BEIJINGHerbert Smith Freehills LLP Beijing Representative Office (UK)T +86 10 6535 5000F +86 10 6535 5055

BELFASTHerbert Smith Freehills LLPT +44 28 9025 8200F +44 28 9025 8201

BERLINHerbert Smith Freehills Germany LLPT +49 30 2215 10400F +49 30 2215 10499

BRISBANEHerbert Smith FreehillsT +61 7 3258 6666F +61 7 3258 6444

BRUSSELSHerbert Smith Freehills LLPT +32 2 511 7450F +32 2 511 7772

HERBERTSMITHFREEHILLS.COM

1552E /210815© Herbert Smith Freehills LLP 2015

Responding to cross-border financial services investigations - Third editionContents Preface: The long arm of regulationGlobal contactsJapan ANNEX 1ANNEX 2ANNEX 3Notes

responding to cross‑border financial services …markets in financial instruments directive (...

Documents