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International Organistion of Securities Commissions - Coggle Diagram
International Organistion of Securities Commissions
An international body of securities regulators generally recognised as the leading regulatory body for the securities sector around the world
IOSCO develops, implements and promotes adherence to international standards for securities regulation
Liaises with other global and regulatory bodies to ensure that these standards continue to evolve
In 1998 - adopted a comprehensive set of objectives and principles of securities regulation (the IOSCO Principles)
ISOCO uses the Principles to assess compliance and will then work with the member to ensure that any deficiencies that they identify as part of their review are rectified. IOSCO will provide assistance with the remediation so far as it is able in helping guide the member on any changes required
In 2002 IOSCO adopted a template called the Multilateral Memorandum of Understanding concerning consulation and cooperation and the exchange of information which enables effective cross border cooperation and exchange of information to help ensure IOSCOs objectives are achieved.
Members sign up to the MMoU to ensure that information can be passed securely and legally between members to assist in law enforcement and investigations for example
Objectives
Assist in the development, implementation and adherence of international standards of regulation, oversight and enforcement so that objectives of investor protection, maintaining market integrity and addressing system risk are met
Partipcate in information exchange when dealing with enforcement action and co-operate with other members so that misconduct and oversight of market activities can be dealt with effectively and efficiently so that consumer confidence in the markets can be maintained
Exchange information with members on their experiences so that it can be used to assist in the oversight of markets and develop more effective and comprehensive regulation where it is required
Principles
When IOSCO was formed its aim was to produce a set of standards that would be used by members as being the benchmark in regulation of each area being revieweed.
IOSCO issued a document dated June 2010 which contains the guiding principles and standards that have been adopted by IOSCO
The regulator
Self-regulation
Enforcement of securities regulation
Co-operation in regulation
Issuers
Auditors, crediting rating agencies and other information providers
CIS
Market intermediaries
Secondary markets
The regulator principles
Responsibilities of the regulator should be clearly stated and enshrined with legal standing
A regulator should be operationally independent, in particular in relation to its decision making processes
They must have adequate powers, proper resources, and the capacity to perform the functions for which it has been formed and exercise their powers in an appropriate and effective manner
Clear and consistent regulatory processes need to be put in place
Staff should be appropriately qualified, experienced and subject to appropriate procedures, including standards of confidentiality
A system should be in place to monitor, mitigate and manage systemic risk within their licensee base
Participate in review and evolution of applicable regulation
Procedures for conflicts of inters and misalignment of incentives should be in place to ensure that they are avoided eliminated disclosed or managed appropriately
When applying for membership, these will be the first criteria that ISOCO will use to assess the regulator against in terms of eligibility. Analysis of the way in which each strand of the requirements is met will be reviewed and documented. If any weaknesses are identified these will need to be addressed before membership is permitted
Principles for enforcement
In order for a regulator to be effectve, it must have sufficient powers to take action against those who break the legislation in place - in that regard IOSCO states that the following are the criteria expected in relation to enforcement
The regulator should have comprehensive inspection, investigation and oversight powers
The regulator should have a range of comprehensive enforcement powers
The regulatory regime should ensure that there is an effective and credible use of inspection, investigation, oversight and enforcement powers and implementation of an effective compliance program
Regulators will generally have a range of enforcement powers varying from fines to preventing people from working in the financial services sector. Some offences may be so serious that criminal charges will need to be brought and the regulaotr will need to work with local law enforcement