INTERNATIONAL: IOSCO Publishes Report on Cross-Border Regulation

Monday September 21 2015

The International Organization of Securities Commissions (IOSCO) has published the final report of the IOSCO Task Force on Cross-Border Regulation.

The final report indicates that cross-border regulation is moving towards more engagement via different forms of recognition to solve regulatory overlaps, gaps, and inconsistencies. While the increased engagement is mostly bilateral at this stage, multilateral engagement is likely to develop further as markets continue to grow and emerge around the world and with the greater use of supervisory Memoranda of Understandings.

The report presents a series of concrete next steps aimed at supporting cross-border regulation and embedding the consideration of cross-border issues more effectively into IOSCO´s work. Among these, IOSCO Policy Committees will start to identify and consider specific cross-border implications of their policy-making. For example, there is a need for consideration of how regulatory timing will work among jurisdictions and whether there should be more multilateral cooperation prior to the domestic policy-making stage. Task Force members also agree that IOSCO should engage more with the G20 and the Financial Stability Board in order to raise greater awareness of the key issues and challenges faced by IOSCO members on cross-border regulation, including the need for more refined thinking on concepts of “deference”.

The report provides a detailed resource for regulators. It includes a toolkit of three broad types of cross-border regulatory options, supporting case studies, a description of the processes used to assess comparability of foreign regulatory regimes, and considerations on the application of the toolkit. These better equip regulators and policy-makers to develop, implement, and evaluate cross-border regulatory approaches.

The report’s analysis and findings are based on a survey across the IOSCO membership regarding their regulatory approaches to cross-border financial activities involving, among others, market intermediaries, securities exchanges and markets, collective investment schemes, and financial market infrastructures. Emphasis was placed on the underlying rationale, experiences, and challenges of developing and implementing these approaches.

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