At the close of its annual conference in Tel Aviv, the International Organization of Securities Commissions stressed its efforts to help deal with the global financial crisis, and announced plans to try and define its role in a post-crisis world.
IOSCO said Thursday that it will issue final reports setting out recommended principles for the regulation of short selling and the oversight of hedge funds in coming weeks. It also plans to consult on principles for disclosure in offerings of asset-backed securities and investment manager due diligence for investing in structured products. IOSCO noted that it will also issue a report on the crisis’ impact on emerging markets and their responses.
As for its own future, the group said that its executive committee has decided to set up a task force to consider its strategic direction in a post-crisis world. It said the task force is being founded due to the greater importance of its operational work, the increased focus on the role IOSCO plays in restoring confidence in the world’s capital markets, and to address how it should be positioned in the future global financial architecture.
“Now more than ever, IOSCO must work towards reaffirming and building confidence in the world’s financial markets, and explore new mechanisms for doing that. Some constants remain of course: reducing systemic risk; encouraging efficient, well-functioning markets; and continuing to protect investors. These essentials are the heart of our mission and always will be,” said Jane Diplock, chairman of the executive committee.
“We need to understand what direction to take in order to reaffirm IOSCO’s pivotal role in the international financial architecture. To do that, we must take account of the lessons every country represented here has learned from the crisis. We need to focus more on identifying risks in financial markets and to addressing stability issues within the purview of securities regulators. Recent work on credit rating agencies and hedge funds are good examples of this focus,” she added.
The task force is comprised of the chairmen and vice-chairmen of the executive, emerging markets and technical committees. “The overarching aim is to position IOSCO to continue to provide the lead in the development of regulatory standards for capital markets in this century, taking account of lessons learned from the global financial crisis and looking towards a more secure future,” it explained. IOSCO reports that the internal consultation process has already begun.
Additionally, IOSCO said that it is very likely to achieve its goal of having every jurisdiction either signed onto its multilateral memorandum of understanding, or committed to signing it, by January 1, 2010. So far, it reports, 55 jurisdictions have implemented the principles contained in our MMOU, and another 27 are committed to do so.
It also added several new members at the annual meeting, including the Canadian Investor Protection Fund. The other new members are the European Commission, the UK’s Financial Services Compensation Scheme, the US Securities Investor Protection Corp., and the Cayman Islands Monetary Authority.
IOSCO’s next annual conference will be held in Montreal next June. At that point, Diplock suggested it will have a good idea of the organization’s future. “We need to begin formulating a vision that will take us beyond this decade and into the next – a vision that looks towards a future without forgetting the past. By the time we meet again, in Montreal in 2010 a broad direction will have been mapped out,” she said.
In 2011, it will head to Cape Town, and it announced that Beijing has been picked as the venue for the 2012 meeting.
IOSCO endorses new set of international auditing standards
Separately, IOSCO declared its support for updated global auditing standards.
In a statement released following its annual conference in Tel Aviv Thursday, IOSCO said today that it is endorsing a new set of international auditing standards. The group noted that it has encouraged the International Auditing and Assurance Standards Board’s efforts at developing International Standards on Auditing, including a recently completed project to restructure and improve these standards.
It is encouraging securities regulators to accept audits performed and reported in accordance with the clarified ISAs for cross-border offerings and listings; and it also encourages them to consider these standards when setting local auditing standards.
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