Where is the Information, Who Can Share it and How?

6.2 Subject to the constraints of applicable law, most Working Party members agree that the exchange of information should be directly between those market authorities in the best position to provide and make use of the information without the intermediation of other market authorities. Generally speaking, this means that information sharing should be between market authorities at the most practical level, e.g., exchanges should share information available to them with other exchanges, to the extent permitted by law. 6.3 However, as access to information may be subject to different legal constraints, determinations as to who can most effectively exchange information during market events must be made taking into consideration legal and practical restrictions on the relevant market authorities. In cases where the authority responsible for overseeing or supervising the integrity of the markets and the participants does not have the legal authority to enter into an information sharing mechanism or to fully share the information covered by such mechanism, it could consult with the appropriate governmental authority to arrange for an appropriate authority to enter into such an agreement on its behalf.

6.4 A flexible approach to deciding which is the appropriate market authority to provide the information is essential for jurisdictions where supervisory activities may be distributed between a central authority on the federal level, the state governments and the markets themselves or where a self-regulatory organization is required by law to "route" information to a foreign authority via a governmental intermediary. Where the market authorities sharing the information are not governmental authorities, it would be useful if such authorities provide notification to the relevant governmental authorities of relevant information.

6.5 Accordingly, Working Party members agree that: • To the extent possible, information should be available to the market authority or authorities with supervisory responsibility for acting on the information shared.

Access, Confidentiality and Use Restrictions

6.7 Most market authorities are subject to domestic laws and regulations governing the confidential treatment of nonpublic information. Some market authorities also are subject to internal rules and procedures or contractual obligations regarding confidentiality while others may follow customary trade and practice regarding the confidential treatment of information. Since the confidentiality requirements vary by jurisdiction, it is possible that the procedures of one market authority for maintaining confidentiality will not be consistent with the disclosure or confidentiality provisions of another market authority. Therefore, Working Party members agree that market authorities should advise each other of relevant laws, regulations or other restrictions applicable in this regard. Specifically, knowledge of restrictions on the market authority's ability to transmit the information and on the permitted uses by the market authority receiving the information may affect the design of any formal and/or informal arrangement and the selection of the parties best situated to effect open and timely communications under given circumstances. For example, in some jurisdictions, information relevant to particular market participants can be obtained only through enforcement-type arrangements. 6.8 It may be possible to overcome differences between the confidentiality requirements and procedures of the market authorities by including confidentiality provisions in any particular arrangement negotiated and undertaken that satisfy the needs of all participating market authorities, although there may be issues as to the enforceability of such arrangements vis-a-vis third parties. In certain instances, however, market authorities should keep in mind that legislation may be required to assure the needed level of confidentiality in the hands of any particular party and to encourage the most effective communication mechanism.

6.9 Market authorities also may wish to address whether and under what circumstances confidential information obtained pursuant to the arrangement may be forwarded by the market authority to other authorities -- domestic or foreign -- which may have an interest in such information. Some market authorities may be required to provide shared information to other regulators, legislators and/or judicial bodies. If restrictions on the permitted uses of the shared information would contravene the domestic laws and regulations of the market authority receiving or providing the information, market authorities may wish to consider the utility of sharing such information or whether separate communication arrangements for periods of market disruption are warranted. Wherever possible, attempts should be made to overcome differences between the permitted use requirements and procedures of the market authorities by including permitted use provisions in any particular arrangement negotiated and undertaken that satisfy the needs of all market authorities.

Form and Timing of Sharing

Applicability of Other Information Arrangements

Incentives to Share - Limitation of Liability

6.14 Therefore, Working Party members agree that: • The design of mechanisms for sharing information on related cash and derivative markets to minimize the adverse effects of market disruptions should take into account the following: - which market authority, whether governmental, quasi-governmental or private, has access to and is able to provide the information,

- how such access can be obtained under applicable law,

- confidentiality and use restrictions under applicable law,

- the form and timing of the sharing,

- the applicability of other arrangements, including MOUs, between such authorities for sharing investigative and financial information, and

- the advisability of expressly limiting liability.