The Securities Industry and Financial Markets Association (SIFMA) today responded to some of the initiatives launched by the G-20 this week, including barriers to global markets, executive compensation, over-the-counter derivatives (OTC derivatives) and the aggregate impact of these reform measures. Tim Ryan, president and ceo of SIFMA, made the following statements:
Aggregate impact of reform measures:
“International standard setters have unveiled an unprecedented level and range of regulatory and legislative initiatives. Before this list of new requirements is implemented, it is critical that we understand their aggregate impact on global economic growth. While individually each initiative may have merit – and the industry supports many reforms – taken together, these reforms could negatively impact investors, capital flows, and economic growth and job creation during a period of global economic vulnerability.”
Global markets:
“Open markets and the free flow of capital and goods are the cornerstones of our global markets. As such, it remains vital to seek a well-balanced and well-coordinated regulatory framework, including a globally agreed upon set of common accounting standards underpinning those initiatives. G20 nations must guard against the potential for the promulgation and implementation of reforms that can result in the type of regulation that the G20 committed to avoid – measures that create barriers to market entry, distort competition, and encourage regulatory arbitrage.”
Trade:
“We also support the Leaders’ call for a successful conclusion to the Doha Round in 2010, with a robust market opening package for financial services.”
Compensation:
“A responsible approach to executive compensation is crucial to restoring trust and confidence in the financial system. Since the crisis, the industry has set new guidelines that support long-term performance and effective risk management. The G-20’s proposals linking compensation to performance and risk, making compensation policies transparent and ensuring compensation committee independence are in line with those guidelines. Boards and compensation committees are reassessing their approaches to compensation to ensure that compensation levels are tied to performance and that compensation policies are aligned with the long-term interests of shareholders.”
OTC Derivatives:
“We support reform of the OTC derivatives markets to bring more transparency and accountability, while ensuring that these vital economic tools remain accessible for firms to manage their risks.“
