The US securities regulator is moving towards a proposal of mutual recognition of foreign financial watchdogs, which will make it easier for non-US markets and brokers to do business with US customers.

The plan is also set to allow foreign exchanges to place trading screens in the US and permit brokers from outside the US to have a US customer base, without necessarily registering their activities with the Securities and Exchange Commission, as is currently required.

SEC chairman Christopher Cox, has asked agency staffers to form a task force that will produce recommendations on mutual recognition of regulators – so that even if those doing business in the US escape SEC oversight, they will still be regulated by the SEC's counterparts in their home-country, AP reported.

SEC market regulation division director, Erik Sirri, told a senate committee yesterday that the approach would be limited to countries with "very similar philosophies and practices to ours," in relation to concerns around fraud, manipulation, insider trading, market surveillance, sales practice rules and dispute resolution.

The SEC's head of international affairs, Ethiopis Tafara, said that while the changes could lower trading costs and encourage competition, it should not be done in a way that would erode investor protections.

Further reading:

SEC Pondering 'Mutual Recognition' Plan