Tag: IOSCO

Nigeria was not listed as a participant as the International Organisation of Securities Commissions (IOSCO) on Monday launched its first World Investor Week (WIW).

IOSCO is global body of securities regulators and its members regulate more than 95 per cent of the world’s securities markets in more than 115 jurisdictions.

Nigeria is a member of both the board of IOSCO and its influential Committee on Retail Investors, otherwise known as Committee 8. However, Nigeria was not listed as one of the participating countries in the epochal week-long event, which was kicked off by IOSCO  with a bell-ringing ceremony at the Tokyo Stock Exchange.

During the world investor week, countries and organisations will engage in activities to promote greater investor education and protection worldwide. The world investor week is expected to run till October 8.

There are 81 participating countries in the maiden event, including Cameroon, Egypt, Ghana, Kenya, South Africa and Zambia.

Throughout the week, securities regulators and other stakeholders from the participating countries across the globe will be providing  various activities to increase the awareness of investor education and protection in their own jurisdictions.

Activities vary from publications of investor-focused communications, to the organisation of workshops and conferences, to local and national investor education campaigns and contests. A dedicated campaign website provides details on the various participating authorities and important international organisations supporting this effort.

Chair of the IOSCO Board and the Chief Executive Officer of the Hong Kong Securities and Futures Commission, Ashley Alder, said the wide variety of global activity in response to IOSCO´s first WIW was encouraging and showed the importance of investor education and protection and the need to bring this in the spotlight.

“Many of the activities that are taking place are centred around the campaign’s key messages that relate to the desired behaviour, skillset and attitude of a smart investor. Continuing to raise awareness is critical not only to investors, but to market participants and regulators as well,” IOSCO Secretary General, Paul Andrews, said.

Nigerian securities regulators could not provide immediate comments on the absence of the country in the global list of participants. Nearly all other members of the IOSCO Board are participating in the maiden investor week.

The members of the IOSCO Board are the securities regulatory authorities of Argentina, Australia, Belgium, Brazil, China, Egypt, France, Germany, Hong Kong, India, Indonesia, Ireland, Italy, Jamaica, Japan, Kenya, Malaysia, Mexico, Nigeria, Ontario, Pakistan, Peru, Quebec, Saudi Arabia, Singapore, South Korea, Spain, Sweden, Switzerland, the Netherlands, Turkey, the United Kingdom, and the United States of America.

Nigeria is a member of the Committee on Retail Investors, which was set up by the IOSCO Board in June 2013. The committee’s primary mandate is to conduct IOSCO’s policy work on retail investor education and financial literacy. Its secondary mandate is to advise the IOSCO Board on emerging retail investor protection matters and conduct investor protection policy work as directed by the IOSCO Board.

The members of Committee 8 are the securities regulatory authorities of Argentina, Australia, Belgium, Brazil, China, France, Germany, Hong Kong, India, Indonesia, Israel, Italy, Japan, Jersey, Luxembourg, Malaysia, Mexico, the Netherlands, Nigeria, Ontario, Portugal, Quebec, Romania, Russia, Saudi Arabia, Singapore, South Africa, Spain, Sri Lanka, Sweden, Chinese Taipei, Thailand, Turkey, the United Kingdom, and the United States of America.

The International Organisation of Securities Commissions has outlined steps aimed at supporting cross-border regulation and embedding the consideration of cross-border issues more effectively into IOSCO´s work. These were part of the highlights of the final report of IOSCO Task Force on Cross-Border Regulation (Task Force).

The International experience of regulators in developing and implementing cross-border regulations in globalised securities markets had highlighted the challenges they faced in ensuring the effectiveness of domestic regulation, without unduly constraining the cross-border offering of financial services or products.  In June 2013, IOSCO established the Task Force to assist policy-makers and regulators in addressing these challenges and to consider in detail cross-border regulatory issues.

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.

The Task Force also conducted three roundtable meetings in Hong Kong, London, and Washington D.C., as well as a public consultation, to gather views from the industry and other stakeholders.

Extensive input were received regarding the challenges in complying with cross-border regulations, and how IOSCO can facilitate the development and implementation of cross-border regulatory tools, and enhance coordination among member regulators.

“Promoting consistent regulatory approaches for cross-border market activities is challenging, not least because it must take into account existing differences in markets, regulatory philosophies and other domestic considerations,” said Mr. Ashley Alder, Chief Executive Officer of the Hong Kong Securities and Futures Commission and Chair of the Task Force.

The International Organisation of Securities Commissions (IOSCO) has launched a project specification for its Committee 6 on Credit Rating Agencies (C6) to gain a better understanding of the credit rating industry and in particular of certain other products or services

To begin work on this project, C6 is undertaking a series of successive information gathering exercises.    The information collected through this exercise will serve as a base for discussions between C6 members, issuers of Other CRA Products and other interested parties.

The second stage will focus on gathering information on how issuers and investors and, more generally, users of the Other CRA Products and services utilise and understand them.

Other CRA Products are distinguishable from the traditional credit ratings that CRAs publicly disclose or disseminate to subscribers.  They may include, for example, private ratings, confidential ratings, expected ratings, indicative ratings, prospective ratings, provisional ratings, preliminary ratings, one-time ratings, regional ratings, national ratings, point-in-time rating, scoring, credit assessments, rating assessments, assessments, or research.

Market participants may use other CRA products to help assess the creditworthiness of an entity or obligation.  Or they may be used for different purposes.  For example, they may be used to understand the impact that a hypothetical or proposed transaction would have on a traditional credit rating or to understand how a CRA would ultimately rate a new issuance.

The International Organisation of Securities Commissions (IOSCO) has published its final report on Principles for the Regulation of Exchange Traded Funds (ETFs) as part of efforts to tighten regulations for the fast-growing segment of the capital market.

The new regulatory framework contains nine principles intended to guide the regulation of ETFs and foster industry best practices. There is only one ETF- the NewGold Exchange Traded Fund on the Nigerian Stock Exchange.

IOSCO underscored the importance of effective regulation for ETFs pointing out that investors’ interest in ETFs has increased worldwide as evidenced by the sharp increase in funds invested in these types of products.

According to IOSCO, assets managed under ETF structures totaled almost $1.9 trillion at the end of January 2013, representing some seven per cent of the global mutual fund market.

“This dynamic growth in ETFs has gradually attracted the attention of regulators, concerned about the potential impact of ETFs on investors and on the broader marketplace, as the industry has continued to evolve through diversification and the launch of new innovative products,” IOSCO noted.

The global body of securities regulators noted that the final report on ETF was a result of numerous consultations among IOSCO’s member regulators and their repeated engagements with representatives of the global ETF industry.

“As such, it reflects a shared consensus within the regulatory community as to how the regulation of ETFs should be approached. Taking into account the comments expressed during the consultation process, IOSCO has focused its final recommendations on features that are specific to ETFs. The principles address ETFs that are organised as Collective Investment Schemes (CIS) and do not apply to other, non-CIS, Exchange-Traded Products (ETPs),” IOSCO stated.

It outlined that the report was structured into two main sections with the first section detailing ETF classification and relevant disclosures for investors, including principles intended to clearly differentiate ETFs from other non-CIS ETPs, as well as from other CIS.

According to IOSCO, it is important that investors are able to appreciate both the similarities and differences of ETFs with other competing products, as well as the way ETFs achieve their investment objective and the quality of their performance typically vis-à-vis a reference index.

The International Organization of Securities Commissions has published the consultation report of the IOSCO Task Force on Cross-Border Regulation, which identifies and describes cross-border regulatory tools and challenges.

IOSCO is the leading international policy forum for securities regulators and is recognized as the global standard setter for securities regulation.  The organization’s membership regulates more than 95 per cent of the world’s securities markets in more than 115 jurisdictions including Nigeria.

The consultation report describes three cross-border regulatory tools that have been used, or are under consideration, by IOSCO members to help address the challenges they face in protecting investors, maintaining market quality and reducing systemic risk.

According to the report, these tools provide the basis for developing a cross-border regulatory toolkit and common terminology describing potential options for IOSCO members to consult when considering cross-border regulations. They can be broadly classified into three main types: national treatment, recognition, and passporting.

The report also includes a detailed discussion of the key challenges and experiences faced by regulators in implementing cross-border securities regulations, including how their national rules will apply to global financial markets and interact with foreign rules and international standards.

In June 2013, IOSCO established the Task Force on Cross-Border Regulation (Task Force) to consider these cross-border regulatory issues and to assist policy makers and regulators in addressing the cross-border challenges they face.

To prepare the consultation report, the Task Force conducted a survey among IOSCO members from late October 2013 to April 2014.

The International Organisation of Securities Commissions (IOSCO) has launched a research into the potential effects of storage infrastructure on the integrity of the price formation process of commodity derivatives in member jurisdictions.

IOSCO is asking its members to respond to the questionnaire and to encourage other relevant entities in their jurisdictions-storage and market infrastructure providers, market participants and end users, to do so as well. There are no restrictions on who can answer the questionnaire.

IOSCO believes that the questionnaire is a fundamental part of its work in this area, as it will inform its thinking going forward.

IOSCO had recently also set up a work agenda to strengthen and foster the roles of capital markets as trusted sources of capital with a view to encouraging greater use of capital markets as financing channels for transactions.

The board of IOSCO, which met recently in Madrid, discussed progress on a number of key initiatives to support the G20-FSB efforts to restore stability in the global financial system and build economic growth.

The board, which included Nigeria’s Securities and Exchange Commission (SEC), also looked into methodologies for identifying non-bank global systemically important financial institutions or activities in the areas of asset management and market intermediaries.

IOSCO also discussed the role capital markets and securities regulators can play in supporting long-term finance, including infrastructure investment and small and medium enterprises (SME )financing.

The meeting also considered the implementation of IOSCO Principles on Financial Benchmarks, the IOSCO Principles for Oil Price Reporting Agencies and the IOSCO Principles for the Regulation and Supervision of Commodity Derivatives Markets.

Chairman, International Organization of Securities Commissions (IOSCO), Greg Medcraft said capital markets are emerging as a key source of the finance needed across the globe to drive economic growth.

“Through a work agenda focused on fostering markets as a trusted source of capital, IOSCO is playing an important role in supporting that growth,” Medcraft noted.

The IOSCO board also discussed audit quality and important initiatives to build confidence in global securities markets and to reduce the reliance of asset managers and market intermediaries on credit ratings as well as promote effective credible deterrence as a key element in improving investor protection and confidence in markets.

Members discussed the results of the IOSCO research department´s latest market survey on market trends, which emphasizes the growing leverage in securities markets, the impact of cross-border capital flows on emerging markets, financial risk disclosure, collateral management, and potential counterparty risk in central clearing houses.

Board members also examined policy measures aimed at building capacity in emerging markets and supporting the creation of strong regulatory frameworks for sustaining growth in both emerging and developed markets.