Global Securities Trading Topic as 10 Nations Meet : Low-Key Conference Seen as First Step to Significant Cooperation on Controls

In the pleasant surroundings of the English countryside south of London, government representatives charged with controlling the globe’s 10 most important securities markets gathered for the first time late last week to discuss their mutual problems.

The meeting had little structure and produced few immediate results, but some believe it could be an important benchmark in efforts among governments to boost cooperation in controlling increasingly global securities trading.

Sense of Urgency

The recent series of insider trading scandals, involving the use of exchanges in several countries, added a sense of urgency to discussions among the representatives, all aware of the growing need to protect the reputations of their markets and the interests of the honest investors who use them.

“This has been an important meeting, not only for what may have been said or decided, but simply that it has taken place at all,” concluded Michael Howard, British minister of state for corporate and consumer affairs, in the session’s only formal speech.

The two-day session, which concluded Friday, produced no common program of action and no declaration of principles; only broad general statements have emerged about the discussions.

It was so secretive that even its location was not officially announced until it had ended. It was so informal that one observer described it as a “jeans and T-shirt affair.”

But according to Brian Hilton, the senior British Department of Trade and Industry undersecretary who chaired the meeting, an unusual degree of confidence and trust was established among key players from each government.

He predicted that this largely get-acquainted meeting would lead to an immediate improvement in the level of informal cooperation among the 10 governments. More formal arrangements could follow in the form of bilateral agreements along the lines of the memorandum of understanding adopted in September by the U.S. Securities and Exchange Commission and Britain’s Department of Trade and Industry.

“The identity of views and shared concerns were striking,” Hilton said. “I’m confident we can improve our international exchange of information from this meeting.”

The Anglo-American memorandum of understanding committed the two governments to share information in cases where both countries are involved.

Information on the illegal insider trading activities of Ivan F. Boesky, for example, was passed by the SEC to the Department of Trade and Industry in London to determine whether Boesky was involved in any illegal activities in connection with a British investment fund that he operated.

Represented at the meeting were the United States, Britain, France, West Germany, the Netherlands, Japan, Hong Kong, Australia, Canada and Switzerland. The U.S. representative was Michael Mann, head of international enforcement for the Securities and Exchange Commission.

While international groups, including the Organization for Economic Cooperation and Development and the International Securities Assn., have discussed the problem of regulating increasingly sophisticated international transactions, no such group includes all 10 governments.

Hilton called the meeting “useful and very successful” and said discussions focused on ways to enhance cooperation, facilitate information exchanges and explore linkages between markets in different countries--all with the idea of improving regulation.

“Getting the right information is what matters in strong regulation,” he said. “We were talking about ways of obtaining it.”

Information the Key

Howard, in his speech to the group, said: “Information is the key. It is the key to monitoring what is going on, it is the key to catching people and is the key to dealing with them when they have been caught.”

Hilton indicated that there may be an increase in the level of routine information passed on by governments whose citizens may be trying to register on a foreign market. “Prevention is better than cure, so we’d like to know about anyone setting up here from another country, and the best way to do that is to check with the government involved,” he said.

He declined to confirm any details of the measures discussed but indicated that none of the countries was singled out for criticism.

“We talked about how best to enforce the laws that now exist,” he stated. “No one country was . . . (on trial).”

However, the vast differences in the laws of the governments that were represented reflected the difficulty of generating meaningful regulation of such problems as insider trading. Several governments represented at the Wiston House meeting do not even consider insider trading illegal.

Hilton indicated that such disparities in the laws of the 10 countries preclude any formal accord to which all might be able to subscribe.

“Multilateral agreements aren’t good,” Hilton stated. “You end up with the lowest common denominator; that is extremely hard to get and doesn’t do very much for you.”

Instead, he indicated that participating governments might try to improve their powers with a series of bilateral accords that could deal with the specific concerns of both parties. Since concluding its memorandum of understanding with the United States, Britain, for example, has begun talks with Japan on a similar agreement.

But as members of the 10 governments met in the English countryside, a number of securities traders, interviewed 50 miles to the north in London’s financial district, differed strongly about the best way to keep the markets clean.

Some argued that only formal government-to-government agreements could overcome obstacles such as statutory restrictions on the disclosure of information about transactions. Others said informal measures would provide quicker, more flexible, more effective responses.

But, significantly, none of those interviewed agreed to be identified by name or company.

Either their own firms have become subject to an insider trading investigation or they were fearful that their remarks might be interpreted as critical of competitors suspected of wrongdoing.

Against a backdrop of jittery markets and investor concern, the 10 governments agreed to meet again next year.