Global regulators seek ways to avert rule disputes

By Huw Jones LONDON (Reuters) - Global regulators want better coordination of rules but not a body to settle disputes like the transatlantic spat over derivatives, a financial watchdog report said on Tuesday. The International Organisation of Securities Commissions (IOSCO) said its report, based on a survey of regulators and banks, was a first attempt at a broad framework for dealing with differing approaches to cross-border regulation. A welter of new rules have been agreed since 2009 in response to the 2007-09 financial crisis. Banks complain of having to comply with national versions of the global rules such for trading financial derivatives like credit default swaps in Europe and the United States. A U.S. regulator last week expressed concerns over the impact on the United States of proposed new European Union rules to regulate market benchmarks. The report from IOSCO, whose members include the U.S. Securities and Exchange Commission, Germany's Bafin and the UK's Financial Conduct Authority, sets out for public consultation three "tools" and common terminology as a basis for dealing with the cross-border impact of rules. There was no backing to give IOSCO binding powers to settle disputes between regulators - a step critics say is needed to overcome powerful national bodies like the U.S. Congress. "Based on the survey responses, there was little support for IOSCO to attempt to coordinate the timing among jurisdictions' implementation of cross-border regulatory tools or to facilitate the settlement of disputes arising from the assessment of foreign regulatory regimes," the report said. "As such, if IOSCO was to have a role in dispute settlement it would most likely be informal and non-binding." Michael McKee, a financial services lawyer at DLA Piper, said that with no global legislation, a voluntary system of dispute settlement was as far as IOSCO could go. "It's another example of IOSCO being imaginative and looking for a role but still struggling to be accepted as having that role," McKee said. Mark Carney, the Bank of England governor who heads the Financial Stability Board, which coordinates rules among leading economies, said this month that improving trust and coordination among regulators is key to the rules being a success. BoE deputy governor Andrew Bailey wants to go further and see regulators coordinating penalties on banks, saying tougher fines from U.S. authorities on European banks could harm financial stability. (Editing by Mark Heinrich)