RELATED TO MARKET OVERSIGHT AND THE SUPERVISION OF

MEMORANDUM OF UNDERSTANDING CONCERNING  
CONSULTATION, COOPERATION'AND THE EXCHANGE OF INFORMATION  
RELATED TO MARKET OVERSIGHT AND THE SUPERVISION OF  
FINANCIAL SERVICES FIRMS  
In view of the growing globalization of the world's financial markets and the 
increase in cross-border operations and activities of financial services firms, 
including large complex financial conglomerates, the United States Securities 
and Exchange Commission 
("SEC)and the German Bundesanstalt fiir 
Finanzdienstleistungsaufsicht ("BaFinn) (collectively, the "Authorities") have 
reached this Memorandum of Understanding ("MOU") setting forth a framework 
for consultation, cooperation and the exchange of information regarding the 
oversight of markets and the supervision of financial services firms. The SEC 
and
.  . . .express, 
through: th.i?.MOU, their willingness 
. . to cooperate with
the BaFin.  . . . . . . 
. . 
... . . . 
each other in the interest of fulfilling their respective regulatory mandates, 
particularly in the areas of investor protection, fostering market integrity, and 
maintaining confidence and systemic stability. 
ARTICLE ONE: DEFINITIONS 
For purposes of this MOU: 
1. 
"Authority" means the SEC or the BaFin. 
a) 
"Requested Authority" means the Authority to whom a request is 
made under this MOU; and 
b) 
"Requesting Authority" means the Authority making a request under 
this MOU. 

2.  "Firm" means : 
a)  
a Person subject to the oversight of one or both of the Authorities, 
who conducts investment, securities, asset management, securities 
processing, insurance, or banking business (collectively "financial 
,services business") in both the United States and Germany, and 
who has its global headquarters in the United States or Germany; 
or 
b) a Related Entity; or  
c) a Dually Regulated Entity.  
3.  "Person" means a natural person, unincorporated association, 
...partnership; trust, investment company or corporation, 
.. . -
4.  "Related Entity" means legal entities or sub-groups of a Firm, including 
affiliates, branches or subsidiaries, regulated by one or both Authorities. 
5.  
"Dually Regulated Entity" means a Person that conducts financial services 
business and is authorized by or registered with both Authorities. 
. 
6.  "Affiliated Market" means a market in the United States and a market in 
Germany, affiliated through a common ownership structure located in 
either jurisdiction or in a third jurisdiction. 
a)  
For the United States, "Market" means a national securities 
exchange registered under Section 
6 of the Securities and 
Exchange Act of 
1934 ("US Market"); 
b)  
For Germany, "Market" means a multilateral system for buying and 
selling interests in financial instruments, which is authorised in 
Germany and functions regulariy and in accordance with the 

provisions of Title Illof the European Markets in Financial 
Instruments Directive (2004139lEC) ("German Market"). 
7.  
"Books and Records" means documents, books and records of, and other 
information about, a Firm. 
8.  
"On-Site Visit" means any routine, sweep, or for-cause regulatory visit to, 
or inspection of the books, records, and premises of, a Firm. 
9.  
"Host Authority" means the Authority in whose jurisdiction a Firm is 
located. 
10.  
"Inspecting Authority" means the Authority performing an On-Site Visit. 
11.  
"Emergency Situation" means the occurrence of an event that could 
materially impair the financial or operational condition of 
a Firm or Market. 
12.  "Governmental Entity" means: 
a)  
The US Treasury Department or the US Federal ~eserve Board, if 
the Requesting Authority is the SEC; and 
b)  
The Deutsche Bundesbank or the Exchange Supervisory 
Authorities of the German federal states, if the Requesting 
Authority is the BaFin. 
ARTICLE TWO: GENERAL PROVISIONS  
13.  
This MOU is a statement of intent to consult, cooperate and exchange 
information in connection with the oversight of  Firms that conduct financial 
services business in the United States and Germany, in a manner 
consistent with, and permitted by, the laws and requirements that govern 

the Authorities. It is anticipated that cooperation would be primarily 
achieved through ongoing, informal, oral consultations, supplemented by 
more in-depth, ad hoc cooperation. The provisions of this MOU are not 
intended to discourage or hinder such informal and oral communication. 
14.  
This MOU does not create any legally binding obligations, confer any 
rights, or supersede domestic laws. This MOU does not confer upon any 
Person the right or ability directly or indirectly to obtain, suppress, or 
exclude any information or to challenge the execution of a request for 
assistance under this MOU. 
15.  
This MOU does not limit an Authority to taking solely those measures 
described herein in fulfillment of its supervisory functions. In particular, 
this MOU.does.nct zffect any right of any Authority to cornmunicate.v:ith, 
conduct an On-Site Visit of, or obtain information or documents from, any 
Person subject to its jurisdiction that is located in the territory of the other 
Authority. 
16.  
This MOU is intended to complement, but does not alter the terms and 
conditions of the following existing arrangements concerning cooperation 
in securities matters: (i) the 
Memorandum of Understanding on Mutual 
Assistance and the Exchange of Information 
between the SEC and the 
BaFin (formerly Bundesaufsichtsamt fiir den Wertpapierhandel) signed on 
October 17, 1997, which covers primarily information-sharing in the 
context of enforcement investigations; and (ii) the 
IOSCO Multilateral 
Memorandum of Understanding Concerning Consultation and 
Cooperation and the Exchange of Information, 
to which the SEC and 
BaFin are signatories, which also covers information-sharing in the 
context of enforcement investigations. 

17.  
The Authorities intend in particular, and to the maximum extent possible, 
that the cooperation and information sharing arrangements under this 
MOU should be implemented in a manner which is compatible with the 
obligations and commitments which an Authority may have toward a 
securities, insurance, asset management, banking or other regulatory 
authority or agency in a member state of the European Economic Area. 
18.  
The Authorities intend periodically to review the functioning and 
effectiveness of cooperation arrangements between the BaFin and 
SEC 
with a view, inter alia, to expanding or altering the scope or operation of 
this 
MOU should that be judged necessary. 
19.  
To facilitate cooperation under this MOU, the Authorities hereby designate 
contsct persons as set forthh Appendix A. 
. . . . . . . . ... . . 
ARTICLE THREE: SCOPE OF SUPERVISORY CONSULTATION, 
COOPERATION AND EXCHANGE OFINFORMATION RELATED TO FIRMS, 
RELATED ENTITIES OR DUALLY REGULATED ENTITIES 
20.  
The Authorities recognize the importance of close communication 
concerning the global operations of Firms, and intend to consult regularly 
regarding general supervisory developments and issues relevant to the 
operations, activities and regulation of such Firms. 
21.  
To the extent practicable and as appropriate in the particular 
circumstances, including the status of efforts to address any difficulties 
experienced 
by a Firm, each Authority endeavors to'inform the other 
Authority in advance of: 

a) 
pending regulatory changes that may have a significant impact on 
the operations, activities, or reputation of a Firm, in the other 
jurisdiction; and 
b) 
any material event that could adversely impact each other's 
markets or the stability of a Firm, in the other jurisdiction. Such 
events include known changes in the operating environment, 
operations, management, or systems and controls. 
The above is without prejudice to any arrangements relating to specific 
prudential issues. 
. 
22. 
To the extent necessary to supplement periodic and ad hoc oral 
consultations, upon written request, each Authority intends to provide to 
. . 
. . the other.Authority the fullest possible cooperation in assisting with.the -. .. --. 
oversight of a Firm, and ensuring compliance with the laws or regulations 
of the Requesting Authority. It is anticipated that such requests will relate 
to information that is not otherwise available to the Requesting Authority. 
. 
The assistance covered by this Paragraph includes, as appropriate to 
each entity, providing: 
a) 
lnformation based upon documents held in the files of the 
Requested Authority relevant to the Requesting Authority's 
oversight of the operations or activities of a Firm. The Requested 
Authority will provide maximum assistance in interpreting such 
information. Such information includes, without limitation: 
i. 
lnformation relevant to the financial and operational condition of 
a Firm, including, for example, capital structure, liquidity and 
funding profiles, and internal controls procedures. 
ii. 
Relevant regulatory information, including, for example: interim 
and annual financial statements; information drawn from 

regulatory reports and filings; early warning notices that a Firm 
is required to submit to an Authority; and information drawn 
from examination reports as may be deemed appropriate or 
relevant by the Requested Authority. 
b)  
The Requesting Authority may (unusually) ask to see copies of 
regulatory reports, filings or other information held in the files of the 
Requested Authority or other information located in the Requested 
Authority's jurisdiction that may be relevant to the Requesting 
Authority's oversight of a Firm. It will be incumbent on the 
Requesting Authority to specify why direct access is required to 
information in this form. 
23.  With respect to asset management, the Authorities agree that -they will- . . .. . --.-
provide each other, upon request, copies of inspection reports of Dually 
Regulated Entities that are involved in asset management, including 
investment advisers, investment fund managers, fund administrators, fund 
trustees, investment companies and investment funds. 
ARTICLE FOUR: ONSITE VISITS OF RELATED ENTITIES AND DUALLY 
REGULATED ENTITIES 
24.  
The SEC may conduct On-Site Visits of Persons located in Germany that 
are either (a) Related Entities that have their global headquarters in the 
United States or (b) Dually Regulated Entities. The BaFin, or the 
examiners commissioned by it, may conduct On-Site Visits of Persons 
located in the United States that are either (a) Related Entities that have 
their global headquarters in Germany or 
(b) Dually Regulated Entities. 
25.  
The Authorities intend to comply with the following procedures before 
conducting an On-Site Visit: 
. -.-. . 

a) The lnspecting Authority will notify the Host Authority of its intent to 
conduct an On-Site Visit, by itself or by a third party commissioned 
by it, the intended time frame for and the scope of the On-Site Visit. 
If practicable, the lnspecting Authority will attempt to notify the Host 
Authority at least one week prior to notifying the Related Entity or 
Dually Regulated Entity covered by this Article. 
b) The Authorities intend to assist each other regarding On-Site Visits, 
including cooperation and consultation in reviewing, interpreting 
and analyzing the contents of public and non-public Books and 
Records; and obtaining information from directors and senior 
management of a Related Entity or Dually Regulated Entity 
covered by this Article. 
c) ,The Host Authority may, in its discretion, accompany the Inspecting 
. . 
Authority during the On-Site Visit and assist in the On-Site Visit. 
ARTICLE FIVE: FRAMEWORK FOR COOPERATION RELATED TO 
AFFILIATED MARKETS 
26.  
In view of the growing trend toward cross border affiliation of markets, the 
SEC and BaFin recognize the importance of establishing a framework for 
coordination and cooperation with respect to the oversight of Affiliated 
Markets at an early stage and to working collaboratively to fulfill our 
respective regulatory mandates. 
27.  
In the event of an affiliation of a US Market and a German Market, the 
SEC and the BaFin will endeavor to enter into written practical 
arrangements, governing the scope and the terms and conditions for 
consultation, cooperation and the exchange of information related to the 

oversight of the Affiliated Markets. Such arrangements once concluded 
and signed by the Authorities will become part of this MOU. 
28.  
The Exchange Supervisory Authorities ("ESA") of the respective German 
federal states ("Bundeslander") where the exchanges are located are 
directly responsible for exchange supervision, with the BaFin being 
charged with cooperation with foreign authorities in matters relating to the 
supervision of securities exchanges. Accordingly, in the event 
of a Market 
affiliation, the SEC and the BaFin will consult with the relevant ESA with a 
view to it becoming a party to any written practical arrangements 
developed under this MOU related to the oversight of the Affiliated 
Markets. 
ARTlCLE~SX: EXECUTION OF REQL'ESTS FOR ASSISTANCE -
--
-. ..  . . . . . .-. .-. . . . . . 
29.  
To the extent possible, a request for written information pursuant to Article 
Three should be made in writing, and addressed to the relevant contact 
person in Appendix A. A request generally should specify the following: 
a) The information sought by the Requesting Authority; 
b) A general description of the matter which is the subject of the 
request and the purpose for which the information is sought; and 
c) The desired time period for reply and, where appropriate, the 
urgency thereof. 
30.  
In Emergency Situations, the Authorities will endeavor to notify each other 
of the Emergency Situation and communicate information to the other as 
would be appropriate in the particular circumstances, taking into account 
all relevant factors, including the status of efforts to address the 
Emergency Situation. During Emergency Situations, requests for 

information may be made in any form, including orally, provided such 
communication is confirmed in writing. 
ARTICLE SEVEN: PERMISSIBLE USES AND CONFIDENTIALIN OF 
INFORMATION 
31.  
Except for disclosures in accordance with this MOU, including permissible 
uses of information under this Article, each Authority intends to keep 
confidential to the extent permitted by law information shared under this 
MOU, requests made under this MOU, the contents of such requests, and 
any othermatters arising under this MOU. 
32.  Subject to paragraphs 35-38 below, the Requesting Authority may use 
- ... non-public information obtained .under this MOU solely for conducting .. .   . 
oversight of Firms and Markets, and seeking to ensure compliance with 
the laws or regulations of the Requesting Authority. 
33.  Except as described in Paragraph 35, in cases where an Authority seeks 
to onward share for supervisory purposes non-public information obtained 
pursuant to this MOU with a third securities, insurance, banking or other 
regulatory authority, including a relevant self-regulatory organization, the 
Requesting Authority undertakes to consult with the Requested Authority 
prior to the information to the third authority and: 
a) provide assurances that the third authority has confirmed that it 
requires the non-public information for a relevant supervisory 
purpose related to a material affiliate of a Firm; and 
b) obtain confirmation from the Requested Authority that the third 
authority has in place an information sharing arrangement with the 
Requested Authority related to supervisory matters, which governs 
..... .. .  . .  .-. -. .-- .- 

the use and confidentialityof any non-public information shared 
under such arrangement. 
If the conditions described in (a) and (b) of this Paragraph are not met, the  
Requesting Authority must obtain consent from the Requested Authority  
prior to providing non-public information obtained under this MOU to a  
third authority. In considering whether to grant consent, the Requested  
Authority will take into account both the Requesting Authority's obligations  
under, and the objectives of, European Directives, with respect to  
requests by the Requesting Authority to onward share information to 
EEA  
members. The Requested Authority will also take into account the  
urgency of the request and respond in a timely manner.  
. . 
.. . .... . . . . .
34; .-. If.an.Authority receives, via a third.pe&y, infometion- related to the .. 
oversight of Firms or Markets provided by the other Authority, the first 
Authority will treat the information in accordance with the terms of this 
MOU. 
35.  
In certain circumstances, it may become necessary for the Requesting 
Authority to share information obtained under this MOU'with other 
Governmental Enpties. In these circumstances and to the extent 
permitted by law: 
a) The Requesting Authority intends to notify the Requested  
Authority.  
b) Prior to passing on the information, the Requested Authority will 
receive adequate assurances concerning the ~overnmental 
Entity's use and confidential treatment of the-information, including, 
as necessary, assurances that the information will not be'shared 
with other parties without getting the prior consent of the 
Requested Authority. 

c)  In the case of Deutsche Bundesbank, the SEC recognizes the 
close working relationship between the BaFin and the Deutsche 
Bundesbank with regard to banking supervision, including some 
Firms covered in the scope of this 
MOU. Pursuant to Section 9 of 
the Getman Banking Act 
("KWG), any information obtained by the 
BaFin under this 
MOU and passed on to the Deutsche Bundesbank 
will be kept confidential, can be used only for supervisory purposes 
under the 
KWG, and cannot be shared by the Deutsche 
Bundesbank with other parties without getting the prior consent of 
the SEC. Accordingly, subject to notice in paragraph 35(a), the 
BaFin may pass on information received from the 
SEC to the 
Deutsche Bundesbank. 
................. 
................ 
... -
..........  
36.  Before using non-public information furnished under this MOU for any 
purpose other than those stated in Paragraph 32, the Requesting 
Authority must first inform the Requested Authority of the intended use. 
As necessary, the Authorities will consult to discuss the reasons for any' 
denial by the Requested Authority of such use and the circumstances 
under which such use might be allowed. 
*  37. As mentioned above, this MOU is intended to complement, but not alter in 
any way, either the 
Memorandum of Undersfanding on Mutual Assisfance 
and the Exchange of Information 
between the SEC and the BaFin 
(October 
17, 1997), or the IOSCO Multilateral Memorandum of 
Understanding Concerning Consulfation and Cooperafion and the 
Exchange of Information. 
The Authorities recognize that while information 
is not to be gathered under the auspices of this 
MOU for enforcement 
purposes, subsequently the Authorities may want to use the information 
for law enforcement. In cases where an Authority seeks to use 
information obtained under this 
MOU for enforcement purposes, including 

in conducting investigations or bringing administrative, civil or criminal 
proceedings, prior consent must be sought from the other Authority. Use 
will be subject to the terms and conditions of the arrangements referred to 
above concerning cooperation in enforcement matters. 
38.  To the extent possible, the Requesting Authority will notify the Requested 
Authority of any legally enforceable demand for non-public information 
furnished under this MOU. Prior to compliance with the demand, the 
Requesting Authority intends to assert all appropriate legal exemptions or 
privileges with respect to such information as may be available. 
39.  
The Authorities intend that the sharing or the disclosure of non-public 
information, including, but not limited to, deliberative and consultative 
..... . 
.. .. .. .. . . . . . .. . . . . . . 
materials, 
to the terms of this MOU, will not constitute a waiver of 
privilege or confidentiality of such information. 
ARTICLE EIGHT: TERMINATION 
Cooperation in accordance with this MOU will continue until the expiration 
of 
30 days after either Authority gives written notice to the other Authority 
of its intention to terminate its cooperation under the MOU. If either 
Authority gives such notice, cooperation will continue with respect to all 
requests for assistance that were made under the MOU before the 
effective date of notification until the Requesting Authority terminates the 
matter for which assistance was requested. In the event of termination of 
this MOU, information obtained under this MOU will continue to be treated 
in the manner prescribed under Article Seven. 

Signed at ,this&ayof ,2007'd,  
Christopher Cox, Chairman 
Joche 
1 Sanio, President 
For the United States 
For the German Bundesanstalt fiir 
Securities and Exchange Commission 
Finanzdienstleistungsaufsicht 

APPENDIX A 
CONTACT OFFICERS 
US Securities and Exchange Commission 
100 F Street NE 
Washington, DC 20549 
USA 
Attention: 
Director, Division of Market Regulation 
Associate Director, Office of Broker-Dealer Finances 
Assistant Director, Office of Financial Responsibility 
Tel: +202-551-5500 
Fax: +202-772-9273 
Director, Office of International Affairs 
.   . 
. .  . .  . . - 
Tel.: (202j.551-6690 ' 
Fax:    (202) 942-9524 
German Bundesanstalt fur Finanzdienstleistungsaufsicht 
Graurheindorfer Str. 108 
531 17 Bonn 
Deutschland 
Attention: 
Thomas Schmitz-Lippert 
Executive Director 
International PoIicylAffairs 
Tel: +49-228-4108-1639 
Fax: +49-228-4108-1550 

MEMORANDUM OF UNDERSTANDING CONCERNING  
CONSULTATION, COOPERATION'AND THE EXCHANGE OF INFORMATION  

RELATED TO MARKET OVERSIGHT AND THE SUPERVISION OF  
FINANCIAL SERVICES FIRMS  

In view of the growing globalization of the world's financial markets and the 

increase in cross-border operations and activities of financial services firms, 

including large complex financial conglomerates, the United States Securities 

and Exchange Commission ("SEC)and the German Bundesanstalt fiir 

Finanzdienstleistungsaufsicht ("BaFinn) (collectively, the "Authorities") have 

reached this Memorandum of Understanding ("MOU") setting forth a framework 

for consultation, cooperation and the exchange of information regarding the 

oversight of markets and the supervision of financial services firms. The SEC 

and. . . .express, through: th.i?.MOU, their willingness . . to cooperate withthe BaFin. . . . . . . . . ... . . . 

each other in the interest of fulfilling their respective regulatory mandates, 

particularly in the areas of investor protection, fostering market integrity, and 

maintaining confidence and systemic stability. 

ARTICLE ONE: DEFINITIONS 

For purposes of this MOU: 

1. "Authority" means the SEC or the BaFin. 

a) "Requested Authority" means the Authority to whom a request is 

made under this MOU; and 

b) "Requesting Authority" means the Authority making a request under 

this MOU. 



2.  "Firm" means : 

a)  a Person subject to the oversight of one or both of the Authorities, 

who conducts investment, securities, asset management, securities 

processing, insurance, or banking business (collectively "financial 

,services business") i n  both the United States and Germany, and 

who has its global headquarters in the United States or Germany; 

or 

b) a Related Entity; or  

c) a Dually Regulated Entity.  

3.  "Person" means a natural person, unincorporated association, 

...partnership; trust, investment company or corporation, .. . -

4.  "Related Entity" means legal entities or sub-groups of a Firm, including 

affiliates, branches or subsidiaries, regulated by one or both Authorities. 

5.  "Dually Regulated Entity" means a Person that conducts financial services 

business and is authorized by or registered with both Authorities. . 

6.  "Affiliated Market" means a market in the United States and a market in 

Germany, affiliated through a common ownership structure located in 

either jurisdiction or in a third jurisdiction. 

a)  For the United States, "Market" means a national securities 

exchange registered under Section 6 of the Securities and 

Exchange Act of 1934 ("US Market"); 

b)  For Germany, "Market" means a multilateral system for buying and 

selling interests in financial instruments, which is authorised in 

Germany and functions regulariy and in accordance with the 



provisions of Title Illof the European Markets in Financial 

Instruments Directive (2004139lEC) ("German Market"). 

7.  "Books and Records" means documents, books and records of, and other 

information about, a Firm. 

8.  "On-Site Visit" means any routine, sweep, or for-cause regulatory visit to, 

or inspection of the books, records, and premises of, a Firm. 

9.  "Host Authority" means the Authority in whose jurisdiction a Firm is 

located. 

10.  "Inspecting Authority" means the Authority performing an On-Site Visit. 

11.  "Emergency Situation" means the occurrence of an event that could 

materially impair the financial or operational condition of a Firm or Market. 

12.  "Governmental Entity" means: 

a)  The US Treasury Department or the US Federal ~eserve Board, if 

the Requesting Authority is the SEC; and 

b)  The Deutsche Bundesbank or the Exchange Supervisory 

Authorities of the German federal states, if the Requesting 

Authority is the BaFin. 

ARTICLE TWO: GENERAL PROVISIONS  

13.  This MOU is a statement of intent to consult, cooperate and exchange 

information in connection with the oversight of Firms that conduct financial 

services business in the United States and Germany, in a manner 

consistent with, and permitted by, the laws and requirements that govern 



the Authorities. It is anticipated that cooperation would be primarily 

achieved through ongoing, informal, oral consultations, supplemented by 

more in-depth, ad hoc cooperation. The provisions of this MOU are not 

intended to discourage or hinder such informal and oral communication. 

14.  This MOU does not create any legally binding obligations, confer any 

rights, or supersede domestic laws. This MOU does not confer upon any 

Person the right or ability directly or indirectly to obtain, suppress, or 

exclude any information or to challenge the execution of a request for 

assistance under this MOU. 

15.  This MOU does not limit an Authority to taking solely those measures 

described herein in fulfillment of its supervisory functions. In particular, 

this MOU.does.nct zffect any right of any Authority to cornmunicate.v:ith, 

conduct an On-Site Visit of, or obtain information or documents from, any 

Person subject to its jurisdiction that is located in the territory of the other 

Authority. 

16.  This MOU is intended to complement, but does not alter the terms and 

conditions of the following existing arrangements concerning cooperation 

in securities matters: (i) the Memorandum of Understanding on Mutual 

Assistance and the Exchange of Information between the SEC and the 

BaFin (formerly Bundesaufsichtsamt fiir den Wertpapierhandel) signed on 

October 17, 1997, which covers primarily information-sharing in the 

context of enforcement investigations; and (ii) the IOSCO Multilateral 

Memorandum of Understanding Concerning Consultation and 

Cooperation and the Exchange of Information, to which the SEC and 

BaFin are signatories, which also covers information-sharing in the 

context of enforcement investigations. 



17.  The Authorities intend in particular, and to the maximum extent possible, 

that the cooperation and information sharing arrangements under this 

MOU should be implemented in a manner which is compatible with the 

obligations and commitments which an Authority may have toward a 

securities, insurance, asset management, banking or other regulatory 

authority or agency in a member state of the European Economic Area. 

18.  The Authorities intend periodically to review the functioning and 

effectiveness of cooperation arrangements between the BaFin and SEC 

with a view, inter alia, to expanding or altering the scope or operation of 

this MOU should that be judged necessary. 

19.  To facilitate cooperation under this MOU, the Authorities hereby designate 

contsct persons as set forthh Appendix A. . . . . . . . . ... . . 

ARTICLE THREE: SCOPE OF SUPERVISORY CONSULTATION, 

COOPERATION AND EXCHANGE OFINFORMATION RELATED TO FIRMS, 

RELATED ENTITIES OR DUALLY REGULATED ENTITIES 

20.  The Authorities recognize the importance of close communication 

concerning the global operations of Firms, and intend to consult regularly 

regarding general supervisory developments and issues relevant to the 

operations, activities and regulation of such Firms. 

21.  To the extent practicable and as appropriate in the particular 

circumstances, including the status of efforts to address any difficulties 

experienced by a Firm, each Authority endeavors to'inform the other 

Authority in advance of: 



a) pending regulatory changes that may have a significant impact on 

the operations, activities, or reputation of a Firm, in the other 

jurisdiction; and 

b) any material event that could adversely impact each other's 

markets or the stability of a Firm, in the other jurisdiction. Such 

events include known changes in the operating environment, 

operations, management, or systems and controls. 

The above is without prejudice to any arrangements relating to specific 

prudential issues. . 

22. To the extent necessary to supplement periodic and ad hoc oral 

consultations, upon written request, each Authority intends to provide to 

. . . . the other.Authority the fullest possible cooperation in assisting with.the - . .. --. 

oversight of a Firm, and ensuring compliance with the laws or regulations 

of the Requesting Authority. It is anticipated that such requests will relate 

to information that is not otherwise available to the Requesting Authority. . 

The assistance covered by this Paragraph includes, as appropriate to 

each entity, providing: 

a) lnformation based upon documents held in the files of the 

Requested Authority relevant to the Requesting Authority's 

oversight of the operations or activities of a Firm. The Requested 

Authority will provide maximum assistance in interpreting such 

information. Such information includes, without limitation: 

i. lnformation relevant to the financial and operational condition of 

a Firm, including, for example, capital structure, liquidity and 

funding profiles, and internal controls procedures. 

ii. Relevant regulatory information, including, for example: interim 

and annual financial statements; information drawn from 



regulatory reports and filings; early warning notices that a Firm 

is required to submit to an Authority; and information drawn 

from examination reports as may be deemed appropriate or 

relevant by the Requested Authority. 

b)  The Requesting Authority may (unusually) ask to see copies of 

regulatory reports, filings or other information held in the files of the 

Requested Authority or other information located in the Requested 

Authority's jurisdiction that may be relevant to the Requesting 

Authority's oversight of a Firm. It will be incumbent on the 

Requesting Authority to specify why direct access is required to 

information in this form. 

23.  With respect to asset management, the Authorities agree that -they will- . . .. . - -.-

provide each other, upon request, copies of inspection reports of Dually 

Regulated Entities that are involved in asset management, including 

investment advisers, investment fund managers, fund administrators, fund 

trustees, investment companies and investment funds. 

ARTICLE FOUR: ONSITE VISITS OF RELATED ENTITIES AND DUALLY 

REGULATED ENTITIES 

24.  The SEC may conduct On-Site Visits of Persons located in Germany that 

are either (a) Related Entities that have their global headquarters in the 

United States or (b) Dually Regulated Entities. The BaFin, or the 

examiners commissioned by it, may conduct On-Site Visits of Persons 

located in the United States that are either (a) Related Entities that have 

their global headquarters in Germany or (b) Dually Regulated Entities. 

25.  The Authorities intend to comply with the following procedures before 

conducting an On-Site Visit: 

. - . - .  . 



a) The lnspecting Authority will notify the Host Authority of its intent to 

conduct an On-Site Visit, by itself or by a third party commissioned 

by it, the intended time frame for and the scope of the On-Site Visit. 

If practicable, the lnspecting Authority will attempt to notify the Host 

Authority at least one week prior to notifying the Related Entity or 

Dually Regulated Entity covered by this Article. 

b) The Authorities intend to assist each other regarding On-Site Visits, 

including cooperation and consultation in reviewing, interpreting 

and analyzing the contents of public and non-public Books and 

Records; and obtaining information from directors and senior 

management of a Related Entity or Dually Regulated Entity 

covered by this Article. 

c) ,The Host Authority may, in its discretion, accompany the Inspecting 
. . 

Authority during the On-Site Visit and assist in the On-Site Visit. 

ARTICLE FIVE: FRAMEWORK FOR COOPERATION RELATED TO 

AFFILIATED MARKETS 

26.  In view of the growing trend toward cross border affiliation of markets, the 

SEC and BaFin recognize the importance of establishing a framework for 

coordination and cooperation with respect to the oversight of Affiliated 

Markets at an early stage and to working collaboratively to fulfill our 

respective regulatory mandates. 

27.  In the event of an affiliation of a US Market and a German Market, the 

SEC and the BaFin will endeavor to enter into written practical 

arrangements, governing the scope and the terms and conditions for 

consultation, cooperation and the exchange of information related to the 



oversight of the Affiliated Markets. Such arrangements once concluded 

and signed by the Authorities will become part of this MOU. 

28.  The Exchange Supervisory Authorities ("ESA") of the respective German 

federal states ("Bundeslander") where the exchanges are located are 

directly responsible for exchange supervision, with the BaFin being 

charged with cooperation with foreign authorities in matters relating to the 

supervision of securities exchanges. Accordingly, in the event of a Market 

affiliation, the SEC and the BaFin will consult with the relevant ESA with a 

view to it becoming a party to any written practical arrangements 

developed under this MOU related to the oversight of the Affiliated 

Markets. 

ARTlCLE~SX: EXECUTION OF REQL'ESTS FOR ASSISTANCE -
-- - . .. . . . . . .- . .- . . . . . . 

29.  To the extent possible, a request for written information pursuant to Article 

Three should be made in writing, and addressed to the relevant contact 

person in Appendix A. A request generally should specify the following: 

a) The information sought by the Requesting Authority; 

b) A general description of the matter which is the subject of the 

request and the purpose for which the information is sought; and 

c) The desired time period for reply and, where appropriate, the 

urgency thereof. 

30.  In Emergency Situations, the Authorities will endeavor to notify each other 

of the Emergency Situation and communicate information to the other as 

would be appropriate in the particular circumstances, taking into account 

all relevant factors, including the status of efforts to address the 

Emergency Situation. During Emergency Situations, requests for 



information may be made in any form, including orally, provided such 

communication is confirmed in writing. 

ARTICLE SEVEN: PERMISSIBLE USES AND CONFIDENTIALIN OF 

INFORMATION 

31.  Except for disclosures in accordance with this MOU, including permissible 

uses of information under this Article, each Authority intends to keep 

confidential to the extent permitted by law information shared under this 

MOU, requests made under this MOU, the contents of such requests, and 

any othermatters arising under this MOU. 

32.  Subject to paragraphs 35-38 below, the Requesting Authority may use 

- ... non-public information obtained .under this MOU solely for conducting .. . . 

oversight of Firms and Markets, and seeking to ensure compliance with 

the laws or regulations of the Requesting Authority. 

33.  Except as described in Paragraph 35, in cases where an Authority seeks 

to onward share for supervisory purposes non-public information obtained 

pursuant to this MOU with a third securities, insurance, banking or other 

regulatory authority, including a relevant self-regulatory organization, the 

Requesting Authority undertakes to consult with the Requested Authority 

prior to the information to the third authority and: 

a) provide assurances that the third authority has confirmed that it 

requires the non-public information for a relevant supervisory 

purpose related to a material affiliate of a Firm; and 

b) obtain confirmation from the Requested Authority that the third 

authority has in place an information sharing arrangement with the 

Requested Authority related to supervisory matters, which governs 

..... .. . . . . - .  - . .-- . -  



the use and confidentialityof any non-public information shared 

under such arrangement. 

If the conditions described in (a) and (b) of this Paragraph are not met, the  

Requesting Authority must obtain consent from the Requested Authority  

prior to providing non-public information obtained under this MOU to a  

third authority. In considering whether to grant consent, the Requested  

Authority will take into account both the Requesting Authority's obligations  

under, and the objectives of, European Directives, with respect to  

requests by the Requesting Authority to onward share information to EEA  

members. The Requested Authority will also take into account the  

urgency of the request and respond in a timely manner.  

. . . . . .... . . . . .34; .-. If.an.Authority receives, via a third.pe&y, infometion- related to the .. 

oversight of Firms or Markets provided by the other Authority, the first 

Authority will treat the information in accordance with the terms of this 

MOU. 

35.  In certain circumstances, it may become necessary for the Requesting 

Authority to share information obtained under this MOU'with other 

Governmental Enpties. In these circumstances and to the extent 

permitted by law: 

a) The Requesting Authority intends to notify the Requested  

Authority.  

b) Prior to passing on the information, the Requested Authority will 

receive adequate assurances concerning the ~overnmental 

Entity's use and confidential treatment of the-information, including, 

as necessary, assurances that the information will not be'shared 

with other parties without getting the prior consent of the 

Requested Authority. 



c)  In the case of Deutsche Bundesbank, the SEC recognizes the 

close working relationship between the BaFin and the Deutsche 

Bundesbank with regard to banking supervision, including some 

Firms covered in the scope of this MOU. Pursuant to Section 9 of 

the Getman Banking Act ("KWG), any information obtained by the 

BaFin under this MOU and passed on to the Deutsche Bundesbank 

will be kept confidential, can be used only for supervisory purposes 

under the KWG, and cannot be shared by the Deutsche 

Bundesbank with other parties without getting the prior consent of 

the SEC. Accordingly, subject to notice in paragraph 35(a), the 

BaFin may pass on information received from the SEC to the 

Deutsche Bundesbank. 
. . . . . . . . . . . . . . . . .  . . . . . . . . . . . . . . . .  . . .  - . . . . . . . . . .   

36.  Before using non-public information furnished under this MOU for any 

purpose other than those stated in Paragraph 32, the Requesting 

Authority must first inform the Requested Authority of the intended use. 

As necessary, the Authorities will consult to discuss the reasons for any' 

denial by the Requested Authority of such use and the circumstances 

under which such use might be allowed. 

*  37. As mentioned above, this MOU is intended to complement, but not alter in 

any way, either the Memorandum of Undersfanding on Mutual Assisfance 

and the Exchange of Information between the SEC and the BaFin 

(October 17, 1997), or the IOSCO Multilateral Memorandum of 

Understanding Concerning Consulfation and Cooperafion and the 

Exchange of Information. The Authorities recognize that while information 

is not to be gathered under the auspices of this MOU for enforcement 

purposes, subsequently the Authorities may want to use the information 

for law enforcement. In cases where an Authority seeks to use 

information obtained under this MOU for enforcement purposes, including 



in conducting investigations or bringing administrative, civil or criminal 

proceedings, prior consent must be sought from the other Authority. Use 

will be subject to the terms and conditions of the arrangements referred to 

above concerning cooperation in enforcement matters. 

38.  To the extent possible, the Requesting Authority will notify the Requested 

Authority of any legally enforceable demand for non-public information 

furnished under this MOU. Prior to compliance with the demand, the 

Requesting Authority intends to assert all appropriate legal exemptions or 

privileges with respect to such information as may be available. 

39.  The Authorities intend that the sharing or the disclosure of non-public 

information, including, but not limited to, deliberative and consultative 
. . . . .  . . .  . .  . .  . .  . . . . . .. . . . . . . 
materials, to the terms of this MOU, will not constitute a waiver of 

privilege or confidentiality of such information. 

ARTICLE EIGHT: TERMINATION 

Cooperation in accordance with this MOU will continue until the expiration 

of 30 days after either Authority gives written notice to the other Authority 

of its intention to terminate its cooperation under the MOU. If either 

Authority gives such notice, cooperation will continue with respect to all 

requests for assistance that were made under the MOU before the 

effective date of notification until the Requesting Authority terminates the 

matter for which assistance was requested. In the event of termination of 

this MOU, information obtained under this MOU will continue to be treated 

in the manner prescribed under Article Seven. 



Signed at ,this&ayof ,2007'd,  

Christopher Cox, Chairman Joche 1 Sanio, President 

For the United States For the German Bundesanstalt fiir 

Securities and Exchange Commission Finanzdienstleistungsaufsicht 



APPENDIX A 

CONTACT OFFICERS 

US Securities and Exchange Commission 
100 F Street NE 
Washington, DC 20549 
USA 

Attention: 

Director, Division of Market Regulation 
Associate Director, Office of Broker-Dealer Finances 
Assistant Director, Office of Financial Responsibility 

Tel: +202-551-5500 
Fax: +202-772-9273 

Director, Office of International Affairs 
. . . . . . . . - 

Tel.: (202j.551-6690 ' 

Fax: (202) 942-9524 

German Bundesanstalt fur Finanzdienstleistungsaufsicht 
Graurheindorfer Str. 108 
531 17 Bonn 
Deutschland 

Attention: 

Thomas Schmitz-Lippert 
Executive Director 
International PoIicylAffairs 
Tel: +49-228-4108-1639 
Fax: +49-228-4108-1550