Waymouth first addressed the EU’s increased activity over the past decade in regulating securities. He attributed the increase to the EC’s objective to create a single European market, which he said is based on the free movement of goods, capital, persons, and services. To achieve a single market, the EU must enact directives, he said, which would require member countries to comply.

He then discussed the EU’s recent actions in securities regulation, pointing to the passage of the Markets in Financial Instruments Directive as the most important of these. MiFID is a principles-based, comprehensive regulatory framework that governs financial trading and intermediation in Europe by providing high levels of investor protection. Waymouth stated that one of MiFID’s goals is to enact regulations, which are self-executing, rather than directives, which require national legislation and might be “gold-plated,” or overridden by member countries’ passage of more stringent regulation.

Waymouth concluded by discussing the implications of the EU’s activities for the United States, stating that standardized EU regulation will make it easier for U.S. companies to do business in the EU. Because the consolidated EU market is too big for the United States to ignore, he said, the EU and the United States are “condemned to cooperate.” Standardized regulation within the EU, he argued, is a step towards mutual recognition, under which U.S. institutions could list and trade their securities in the EU markets but only be subject to the SEC regulations, and EU companies could trade their securities in the United States but only be subject to EU regulation.

By Todd Batson ’09