Difference between revisions of "Memorandum Of Understanding"

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A memorandum Of understanding (MOU) is an agreement between two parties and is often the same as a letter of intent. Many financial industry [[exchange]]s have signed MOUs with other exchanges in an effort to position themselves for a more global environment. These agreements between exchanges provide the opportunity to develop products that will benefit market users and enhance resources to educate individuals on the specific services of each exchange. Non-exchange MOUs have been agreed upon for the sharing of information and partnership opportunities.
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A memorandum of understanding (MOU) is a legal agreement between two parties that carries less weight than a formal contract but more than an informal agreement, and outlines the parties' rights and responsibilities under the memorandum. MOUs are commonly used in international agreements and the term is sometimes used as a synonym for "letter of intent".
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== First step ==
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While an MOU does not have the same legal standing as a formal contract, it is often used as the first stage of the contract process, since it is legally enforceable if one of the parties fails to meet its obligations.<ref>{{cite web|url=http://www.answers.com/topic/memorandum-of-understanding|name=Memorandum of Understanding - MOU|org=Answers.com|date=January 7, 2008}}</ref> MOUs are commonly used in international public law on place of treaties, since their terms can be kept confidential, don't require ratification and can be modified without lengthy negotiations.<ref>{{cite web|url=http://www.wisegeek.com/what-is-a-memorandum-of-understanding.htm|name=What is a Memorandum of Understanding?|org=WiseGeek.com|date=January 7, 2008}}</ref>
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In the U.S. financial services industry, an MOU negotiated between an [[institution]] and its regulator or supervisor indicates that the [[bank]], while not admitting any wrongdoing, will refrain from a practice deemed unsound by the regulator and take future action to correct the practice.<ref>{{cite web|url=http://www.allbusiness.com/glossaries/memorandum-understanding/4945382-1.html|name=Memorandum of understanding|org=Allbusiness.com|date=January 7, 2008}}</ref>
  
 
== Exchange MOUs ==
 
== Exchange MOUs ==
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Many financial industry [[exchange]]s have signed MOUs with other exchanges in an effort to position themselves for a more global environment. These agreements between exchanges provide the opportunity to develop products that will benefit market users and enhance resources to educate individuals on the specific services of each exchange. Non-exchange MOUs have been agreed upon for the sharing of information and partnership opportunities.
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=== CME Group ===
 
=== CME Group ===
 
* CME and [[Osaka Securities Exchange]] signed an MOU on Sept. 3, 2008.<ref>{{cite web|url=http://investor.cmegroup.com/investor-relations/releasedetail.cfm?ReleaseID=331815
 
* CME and [[Osaka Securities Exchange]] signed an MOU on Sept. 3, 2008.<ref>{{cite web|url=http://investor.cmegroup.com/investor-relations/releasedetail.cfm?ReleaseID=331815
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=== CBOE ===
 
=== CBOE ===
 
*CBOE and [[Taiwan Futures Exchange]] entered into a memorandum of understanding on Sept. 6, 2007.<ref>{{cite web|url=http://www.cboe.com/AboutCBOE/ShowDocument.aspx?DIR=ACNews&FILE=cboe_20070906b.doc&CreateDate=06.09.2007|name=Press Release|org=CBOE|date=October 20, 2008}}</ref>
 
*CBOE and [[Taiwan Futures Exchange]] entered into a memorandum of understanding on Sept. 6, 2007.<ref>{{cite web|url=http://www.cboe.com/AboutCBOE/ShowDocument.aspx?DIR=ACNews&FILE=cboe_20070906b.doc&CreateDate=06.09.2007|name=Press Release|org=CBOE|date=October 20, 2008}}</ref>
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*CBOE and [[the Shenzhen Stock Exchange]] signed a memorandum of understanding on November 1, 2005. <ref> {{cite web|url = http://www.cboe.com/AboutCBOE/ShowDocument.aspx?DIR=ACNews&FILE=20051101.doc&CreateDate=01.11.2005|name=Press Release|org=CBOE|date=November 14, 2008}} </ref>
  
 
=== ISE ===
 
=== ISE ===
*The [[International Securities Exchange]] signed a memorandum with the [[Osaka Securities Exchange]] on Feb. 24, 2008, to establish a relationship and take the first step toward coordinating efforts for the launch of a new, jointly owned [[trading platform]].<ref> {{cite web|url=http://www.reuters.com/article/pressRelease/idUS72174+24-Feb-2008+BW20080224|name=Press Release|org=Reuters|date=October 20, 2008}} </ref>
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*The [[International Securities Exchange]] signed a memorandum with the [[Osaka Securities Exchange]] on Feb. 24, 2008 to establish a relationship and take the first step toward coordinating efforts for the launch of a new, jointly owned [[trading platform]].<ref> {{cite web|url=http://www.reuters.com/article/pressRelease/idUS72174+24-Feb-2008+BW20080224|name=Press Release|org=Reuters|date=October 20, 2008}} </ref>
  
 
=== NASDAQ ===
 
=== NASDAQ ===
*[[NASDAQ]] and the [[Tel-Aviv Stock Exchange]] signed an MOU on Nov. 26, 2007, to formalize a relationship between the two markets.<ref> {{cite web|url=http://files.shareholder.com/downloads/NDAQ/0x0x146176/ca999666-45f5-4593-a876-3a06d0702c34/NDAQ_News_2007_11_26_General.pdf|name=Press Release|org=NASDAQ|date=October 20, 2008}} </ref>
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*[[NASDAQ]] and the [[Tel-Aviv Stock Exchange]] signed an MOU on Nov. 26, 2007 to formalize a relationship between the two markets.<ref> {{cite web|url=http://files.shareholder.com/downloads/NDAQ/0x0x146176/ca999666-45f5-4593-a876-3a06d0702c34/NDAQ_News_2007_11_26_General.pdf|name=Press Release|org=NASDAQ|date=October 20, 2008}} </ref>
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=== Singapore Exchange ===
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*[[Singapore Exchange Limited]] ([[SGX]]) and [[Karachi Stock Exchange]] (KSE) signed an MOU on October 22, 2008 to collaborate for the benefit of the financial services industries in Singapore and Pakistan. The MOU aims to foster a closer relationship between both exchanges. This includes sharing best practices regarding each exchange’s products as well as the operation and governance of their respective markets.<ref>{{cite web |url=http://info.sgx.com/webnewscentre.nsf/bcb6f015b16e5258482569a7001af139/48256838002f07b1482574ea0033868a?OpenDocument| name=SINGAPORE EXCHANGE AND KARACHI STOCK EXCHANGE SIGN MOU FOR COLLABORATION|org=Singapore Exchange|date=October 22, 2008}}</ref>
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*[[Singapore Exchange Limited]] ([[SGX]]) AND FUJIAN PROVINCIAL GOVERNMENT SIGN LISTING MOU<ref>{{cite web|url=http://info.sgx.com/webnewscentre.nsf/bcb6f015b16e5258482569a7001af139/48256838002f07b1482574f60033ab00?OpenDocument|name=SGX AND FUJIAN PROVINCIAL GOVERNMENT SIGN LISTING MOU|org=Singapore Exchange Limited|date=November 3, 2008}}</ref><br>The MOU aims to further promote the listings of Fujian enterprises on SGX.
  
 
== Regulatory MOUs ==
 
== Regulatory MOUs ==
*The [[Securities and Exchange Commission]] and the [[Commodities Futures Trading Commission]] signed a memorandum of understanding on March 11, 2008, to coordinate their efforts in areas of common regulatory interest in order to foster market innovation, fair competition and to promote efficiency in regulatory oversight.  <ref> {{cite web|url=http://www.sec.gov/news/press/2008/2008-40_mou.pdf|name=Press Release|org=SEC|date=October 20, 2008}} </ref>
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*The [[Securities and Exchange Commission]] and the [[Commodities Futures Trading Commission]] signed a memorandum of understanding on March 11, 2008 to coordinate their efforts in areas of common regulatory interest in order to foster market innovation, fair competition and to promote efficiency in regulatory oversight.  <ref> {{cite web|url=http://www.sec.gov/news/press/2008/2008-40_mou.pdf|name=Press Release|org=SEC|date=October 20, 2008}} </ref>
  
*The [[Securities and Exchange Commission]], the [[Commodities Futures Trading Commission]] and the [[Bank of England]] signed a memorandum of understanding,on Oct. 28, 1997, to set forth a cooperative approach to sharing supervisory information. It is the first formal agreement among US and UK Securities, futures and banking regulators. The MOU was signed by SEC Chairman [[Arthur Levitt]], CFTC Commissioner [[Barbara Holum]], the Bank of England Governor, [[Eddie George]] and by [[Howard Davies]] who is the Chairman of the UK's [[Financial Services Authority]].<ref> {{cite web|url=http://www.cftc.gov/opa/press97/opa4068-97.htm|name=Press Release|org=CFTC|date=October 20, 2008}}</ref>
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*The [[Securities and Exchange Commission]], the [[Commodities Futures Trading Commission]] and the [[Bank of England]] signed a memorandum of understanding,on Oct. 28, 1997 to set forth a cooperative approach to sharing supervisory information. It is the first formal agreement among US and UK Securities, futures and banking regulators. The MOU was signed by SEC Chairman [[Arthur Levitt]], CFTC Commissioner [[Barbara Holum]], the Bank of England Governor, [[Eddie George]] and by [[Howard Davies]] who is the Chairman of the UK's [[Financial Services Authority]].<ref> {{cite web|url=http://www.cftc.gov/opa/press97/opa4068-97.htm|name=Press Release|org=CFTC|date=October 20, 2008}}</ref>
  
 
*The [[Securities and Exchange Commission]] and the [[College of Euronext Regulators]], which includes; The Netherlands, France, Belgium, Portugal, the United Kingdom and the United States, entered a memorandum of understanding, in January of 2007, when Euronext combined with the [[New York Stock Exchange]] in order to create the new group, [[NYSE Euronext]]. The MOU expresses each parties willingness to cooperate with each other in the interest in fulfulling their respective regulatory mandates particulary in the area of investor confidence and systemic stability.<ref> {{cite web|url=http://www.sec.gov/about/offices/oia/oia_bilateral/euronext-mou-eng.pdf|name=Press Release|org=SEC|date=October 20, 2008.}} </ref>
 
*The [[Securities and Exchange Commission]] and the [[College of Euronext Regulators]], which includes; The Netherlands, France, Belgium, Portugal, the United Kingdom and the United States, entered a memorandum of understanding, in January of 2007, when Euronext combined with the [[New York Stock Exchange]] in order to create the new group, [[NYSE Euronext]]. The MOU expresses each parties willingness to cooperate with each other in the interest in fulfulling their respective regulatory mandates particulary in the area of investor confidence and systemic stability.<ref> {{cite web|url=http://www.sec.gov/about/offices/oia/oia_bilateral/euronext-mou-eng.pdf|name=Press Release|org=SEC|date=October 20, 2008.}} </ref>
  
 
== Broker/Dealer MOUs ==
 
== Broker/Dealer MOUs ==
*Reliance Money, the largest brokerage house in India, signed a memorandum of understanding with [[OptionsXpress]] to provide access, custody and execution services for their customers looking to trade in the U.S. markets.<ref> {{cite web|url=http://www.hindu.com/2008/09/09/stories/2008090961061600.htm|name= Press Release|org=The Hindu|date=October 20,2008}}</ref>
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*Reliance Money, the largest[[ brokerage]] house in India, signed a memorandum of understanding with [[OptionsXpress]] to provide access, custody and execution services for their customers looking to trade in the U.S. markets.<ref> {{cite web|url=http://www.hindu.com/2008/09/09/stories/2008090961061600.htm|name= Press Release|org=The Hindu|date=October 20,2008}}</ref>
  
 
== References ==
 
== References ==
 
<references />
 
<references />
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[[Category:Definitions]]

Latest revision as of 09:55, 5 January 2012

A memorandum of understanding (MOU) is a legal agreement between two parties that carries less weight than a formal contract but more than an informal agreement, and outlines the parties' rights and responsibilities under the memorandum. MOUs are commonly used in international agreements and the term is sometimes used as a synonym for "letter of intent".

First step

While an MOU does not have the same legal standing as a formal contract, it is often used as the first stage of the contract process, since it is legally enforceable if one of the parties fails to meet its obligations.[1] MOUs are commonly used in international public law on place of treaties, since their terms can be kept confidential, don't require ratification and can be modified without lengthy negotiations.[2]

In the U.S. financial services industry, an MOU negotiated between an institution and its regulator or supervisor indicates that the bank, while not admitting any wrongdoing, will refrain from a practice deemed unsound by the regulator and take future action to correct the practice.[3]

Exchange MOUs

Many financial industry exchanges have signed MOUs with other exchanges in an effort to position themselves for a more global environment. These agreements between exchanges provide the opportunity to develop products that will benefit market users and enhance resources to educate individuals on the specific services of each exchange. Non-exchange MOUs have been agreed upon for the sharing of information and partnership opportunities.

CME Group

CBOE

ISE

NASDAQ

Singapore Exchange

  • Singapore Exchange Limited (SGX) and Karachi Stock Exchange (KSE) signed an MOU on October 22, 2008 to collaborate for the benefit of the financial services industries in Singapore and Pakistan. The MOU aims to foster a closer relationship between both exchanges. This includes sharing best practices regarding each exchange’s products as well as the operation and governance of their respective markets.[9]
  • Singapore Exchange Limited (SGX) AND FUJIAN PROVINCIAL GOVERNMENT SIGN LISTING MOU[10]
    The MOU aims to further promote the listings of Fujian enterprises on SGX.

Regulatory MOUs

  • The Securities and Exchange Commission and the College of Euronext Regulators, which includes; The Netherlands, France, Belgium, Portugal, the United Kingdom and the United States, entered a memorandum of understanding, in January of 2007, when Euronext combined with the New York Stock Exchange in order to create the new group, NYSE Euronext. The MOU expresses each parties willingness to cooperate with each other in the interest in fulfulling their respective regulatory mandates particulary in the area of investor confidence and systemic stability.[13]

Broker/Dealer MOUs

  • Reliance Money, the largest brokerage house in India, signed a memorandum of understanding with OptionsXpress to provide access, custody and execution services for their customers looking to trade in the U.S. markets.[14]

References

  1. Memorandum of Understanding - MOU. Answers.com.
  2. What is a Memorandum of Understanding?. WiseGeek.com.
  3. Memorandum of understanding. Allbusiness.com.
  4. Press Release. CME.
  5. Press Release. CBOE.
  6. Press Release. CBOE.
  7. Press Release. Reuters.
  8. Press Release. NASDAQ.
  9. SINGAPORE EXCHANGE AND KARACHI STOCK EXCHANGE SIGN MOU FOR COLLABORATION. Singapore Exchange.
  10. SGX AND FUJIAN PROVINCIAL GOVERNMENT SIGN LISTING MOU. Singapore Exchange Limited.
  11. Press Release. SEC.
  12. Press Release. CFTC.
  13. Press Release. SEC.
  14. Press Release. The Hindu.