IOSCO Working Party members have adopted a variety of approaches to obtain information for securities and futures enforcement purposes from uncooperative and under-regulated jurisdictions. Some methods require the involvement of local authorities; others may be used without their involvement.

The approaches listed below are being discussed in the context of under-regulated and uncooperative jurisdictions where no formal route for obtaining information exists. The list is intended only to reflect the experience of one or more IOSCO Working Party no. 4 members. It is not intended to be either comprehensive or evaluative. In using these approaches, securities and futures regulators operate within the scope of their own legal authority, including rights and obligations derived from international treaties, and in consideration of existing agreements, arrangements and applicable laws.

Furthermore, the use of such approaches by securities and futures regulators is not in itself an indication that the requested jurisdiction is either under-regulated or uncooperative. Indeed, some of these methods are also used to obtain information from highly regulated and fully cooperative jurisdictions. In addition, we note that although certain otherwise under-regulated ant uncooperative jurisdictions have agrees to regulate and cooperate in the are of money laundering enforcement, they have one extended such cooperation to the enforcement of securities and futures fraud.

A. APPROACHES REQUIRING THE INVOLVEMENT OF LOCAL AUTHORITIES

Even in under-regulated and uncooperative jurisdictions, certain information may be available from the local authorities. As discussed below, securities and futures authorities may be able to obtain information from the local registrar of companies and through the use of judicial or criminal channels

1. Access to Local Registrar of Companies

Certain information about corporate entities and their owners is available from the registrar of companies in the relevant jurisdiction. However, such information generally is limited to information in the public record and frequently identifies only the names of nominee owners and management companies or professional incorporators.

Therefore, it is often of limited utility in identifying the persons who actually own or control the company, although it may be a link in the investigative chain.

2. Criminal and Judicial Channels

In some jurisdictions, the only available gateway for information is a criminal or a judicial authority; information in possession of or gathered by such authorities is not always available to securities and futures regulators. However, criminal authorities in some jurisdictions, recognizing that they are only accessible route for obtaining assistance in the securities and futures area, are willing to provide assistance to foreign securities and futures regulators.

The use of criminal and judicial channels may follow different patterns, including (a) using existing Mutual Legal Assistance Treaties (b), issuing letters rogatory and (c) developing informal cooperation.

a. Criminal mutual legal assistance treaties

In certain instances, securities and futures regulators have been able to use a mutual legal assistance treaty (ìMLATî) to ask the criminal authorities of a foreign jurisdiction to compel the production of documents and testimony of witnesses. MLATs can provide a means for overcoming blocking or secrecy laws. However, their usefulness is limited to those instances where the scope of the MLAT includes securities and futures violations; the offence is also an offence in the country from whom assistance is requested (unless provided otherwise in the MLAT); and the regulator requesting assistance is a criminal authority or the MLAT extends to civil and administrative as well as criminal investigations.

b. Other means for judicial assistance

With respect to jurisdictions without a foreign securities or futures regulatory authority or a sufficiently broad MLAT, or where the regulatory authorities cannot or will not themselves obtain and transmit the information, those seeking information may be able to use judicial letters rogatory or ocher instruments to request that the appropriate authority in the foreign jurisdiction compel the production of documents or the testimony of witnesses. This can be very effective but time-consuming; it also can be expensive because the requesting authority often will need to hire counsel in the forage country.

c.Informal cooperation with criminal authorities

In the absence of an MLAT or other formal criminal channel, it is possible to seek assistance directly from foreign criminal authorities, who may have the authority to provide at their discretion information in their possession, or even be authorized to gather information in appropriate cases. This type of cooperation has in some cases proved very helpful, because the local criminal authorities generally are granted sufficient powers to be in a position to provide timely and effective assistance. The degree of cooperation by the criminal authorities, however, varies from jurisdiction to jurisdiction. In addition, legal or other restriction may preclude the use of information thus informally obtained in subsequent judicial or administrative proceedings.

B. APPROACHES BASED ON DIRECT CONTACTS WITH THE PERSONS OR ENTITIES FROM WHICH INFORMATION IS SOUGHT

In some cases, members of the group have obtained information directly from the persons or entities involved in the investigation.

Depending upon the facts and circumstances of the particular situation, the "direct contact" may take various forms, including: (1) voluntary cooperation, (2) contact in the home jurisdiction, (3) freeze of illegally obtained funds or assets, and (4) legal action against persons or entities who obstruct investigation.

1. Voluntary cooperation

The cooperation provided may include informal discussions with the witness, communication of information or documents, and taking of testimonies. It may or may not involve representatives of the requesting authority entering the jurisdiction of the witness.

The usefulness of seeking voluntary cooperation is limited, however, not only by the willingness of the person or entity to cooperate, but also by professional secrecy and other legal requirements which may restrict the ability of such persons or entities to disclose information. In addition, financial institutions or professionals may have a fiduciary obligation to their clients to maintain confidentiality that prevents them from disclosing client information voluntarily. In such cases, however, the difficulty has sometimes been overcome by asking the professional to request its client to waive secrecy, if permitted by law.

2. Contacts in the home jurisdiction

A foreign financial institution may have an affiliate, bench or representative located in the country of the securities or futures regulator seeking the information that can provide a conduit for voluntary cooperation. The foreign institution may refuse to provide the information by asserting secrecy obligations governing it activities in its own jurisdiction.

Similarly, when an individual who possesses relevant information travels voluntarily to the regulator’s country, he may then come within the reach of compulsory process available to that regulator. The regulator may then obtain information from such a person in the same manner and to the same extent as from a citizen or resident of the regulator's own country.

3. Freezing of funds derived from illegal activities

A regulator investigating a violation of its own securities or futures laws may be able to obtain a freeze of funds derived from illegal activities. Under such circumstances, the account holder may choose to come forward and cooperate with the regulator.

4. Taking legal action against the persons or entities who obstruct investigations

In the event that a person or entity from an under-regulated and uncooperative jurisdiction who is lawfully served with a subpoena or other request for compulsory process refuses to comply, some securities or futures regulators can bring a charge of obstruction of justice or contempt of court before the judicial authorities. In addition, in some countries, when property of the person or entity is located in the regulator's jurisdiction, it may be available to satisfy any fines imposed.