Global securities regulators are claiming progress on a number of elements of their reform agenda, and also suggested that they may initiate new work on retail investor protection.
The board of the International Organization of Securities Commissions (IOSCO) met in Madrid this week to discuss its ongoing reform work and possible new areas to tackle.
This was the board’s first meeting since its creation at IOSCO’s Annual Conference in Beijing to give IOSCO a more efficient and inclusive structure.
At the Madrid meeting, the IOSCO board reiterated its commitment to meet its deadlines on work that has been mandated by the G20 and the Financial Stability Board (FSB) on regulatory reform — including developing a methodology to identify systemically important firms, such as hedge funds and brokers; and, reforms to the over-the-counter derivatives market. It also approved recommendations on the regulation of money market funds and oil price reporting agencies, and says that it made further progress on recommendations to address developments in securitization regulation, which it expects to complete in a few weeks.
In terms of possible new areas of work, the board also discussed possibly starting work on investor protection in the context of retail financial services and products, it says; and, considered developing a mandate on the impact of differing regulatory requirements on cross-border activity in securities markets.
A new board level task force that was struck to examine financial market benchmarks in the wake of the LIBOR manipulation scandal also held its first meeting in conjunction with the board meeting, and drew up its work plan for developing recommendations on safeguards against abusive practices in benchmark setting by the first quarter of 2013.
Additionally, IOSCO reports that Michel Prada, chairman of the trustees of the IFRS Foundation met with the board, and urged IOSCO to play a larger role in global efforts to further the international adoption and implementation of international financial reporting standards. This proposal will be taken up by IOSCO’s committee on accounting issues.
And, it says, its standing committee on risk and research updated the board on its work to produce a practical methodology for recognizing and measuring systemic risk in securities markets.
Finally, IOSCO also reports that three more regulators (from Bosnia, El Salvador and the UAE) have been invited to sign its memorandum of understanding on cooperation and information sharing. IOSCO has set a deadline of January 2013 for all its members to sign the MoU.