Several financial watchdogs control the global capital markets. Each one takes a corner of the world, regulating the securities market within a specific country or region. The UK’s Financial Conduct Authority (FCA) joins other popular acronyms like the SEC and ESMA in protecting investors and increasing public confidence in local markets.
As an investment relations officer (IRO), a comprehensive understanding of all the regulatory bodies and their standards is crucial. Compliance failures can lead to stiff penalties issued by the regulatory body, as well as damage to your reputation when your non-compliance calls into question your company’s integrity.
Securities and Exchange Commission (SEC)
The Securities and Exchange Commission (SEC) is a financial regulator in the United States of America, although it is one of the most prominent regulatory bodies in the world. It oversees US securities to ensure fair and efficient trading.
Let’s say your company lists on the New York Stock Exchange (NYSE), the single biggest exchange in the world. Located in the US, the NYSE falls under the scope of the SEC. As a result, you would report to the SEC, packaging your quarterly and annual filings in a specific way and sharing them at predetermined times. The SEC also regulators how and when you share crucial financial and operational information, such as balance sheets and ESG disclosures.
European Securities and Markets Authority (ESMA)
The European Securities and Markets Authority (ESMA) is one of three financial organisations in the European Union (EU). Like the SEC, ESMA promotes stable and orderly markets across the EU. However, it also harmonises individual financial regulations established in member states. These country-level regulators add a level of nuance to global reporting for IROs.
Let’s say your company lists on Nasdaq Stockholm (formerly the Stockholm Stock Exchange), the primary exchange in Nordic countries. Your company would have to adhere to both EU-level regulations and Sweden’s own Financial Supervisory Authority (FSA). The FSA ensures banks, securities, and insurance meet compliance to stabilise the Swedish markets.
Working with an experienced IR firm
Meeting compliance with just one securities authority can pose challenges for your team, let alone several. Each regulatory body has unique reporting laws and schedules, which you must follow. Maintaining compliance is easier when you have an experienced IR firm on your team. Here’s what these professionals bring to the table:
Expert knowledge of regulations
A seasoned IR firm possesses an in-depth understanding of global financial regulations. Better yet, they stay up to date with evolving reporting laws and schedules, ensuring companies are aware of new requirements and deadlines as they come into effect.
Reputable IR firms offer more than just hands-off consultation services. A firm like Q4 also provides an end-to-end solution that includes CRM platforms, IR websites, event management, webcasting, and engagement analytics. You can visit Q4 Sweden to learn how these analysis and communication tools can assist you when listing on international markets.
Compliance protects your IR program
Knowing the reporting rules is crucial for your business as it expands its global presence. The FCA, SEC, ESMA, and FSA are just a handful of examples of the world’s regulators. An experienced IR firm can help you navigate this alphabet soup with local expertise and a premium suite of IR tools.