Marc Lackritz, president of U.S. Securities Industry Association, spoke to the U.S. House Banking Committee on the securities industry’s efforts to dismantle the financial infrastructure of global terrorism.

Lackritz said that the SIA immediately informed its members of the new list of suspected terrorists and terrorist organizations developed by the FBI, and asked its members to seek any links among their records. He noted that many firms also received requests from SROs for information on trading in 38 stocks in the days leading up to September 11

“Firms are going beyond those requests and examining and looking for unusual trading patterns in equities, fixed income, options and futures in certain industries.”

Lackritz noted that two days ago many of its firms met in New York to coordinate what they are doing in response to requests from regulators and federal authorities. There will also be a meeting tomorrow between member firms and several regulatory and law enforcement representatives to inform the agencies what the industry is doing.

He noted that while the SIA is supportive of the need to have anti-money laundering legislation, he said that to the extent that any legislation imposes additional due diligence obligations on financial institutions “we believe it is very important to provide flexibility with respect to those requirements. We also think legislation should help to facilitate communication between broker-dealers and between banks and broker-dealers when they are investigating suspicious activity.”

The SIA also supports creating a joint industry/government task force to address these issues.

As for Canada’s Investment Dealers Association, the IDA says that it anticipates that Canadian firms will be required to set up monthly reporting of compliance with the new anti-terrorist financing regulations introduced by the government yesterday.

It has yet to be determined whether the SROs or the provincial securities commissions will take responsibility for monitoring compliance.