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The IOSCO launched three task forces to support G-20 to co-ordinate global regulatory measures on short selling, unregulated financial markets and products, and unregulated entities including hedge funds.
“The regulation of trading abuses must be co-ordinated across major markets”, IOSCO chair Christopher Cox said. “This is equally true not only of short-selling, but also of derivatives trading and activity by currently unregulated entities such as hedge funds.”
Ø The Task Force on Short Selling will work to eliminate gaps in various regulatory approaches to naked short-selling, including delivery requirements and disclosure of short positions. It will also examine how to minimize adverse impacts on legitimate securities lending, hedging and other types of transactions that are critical to capital formation and to reducing market volatility.
Ø The Task Force on Unregulated Financial Markets and Products will examine ways to introduce greater transparency and oversight to unregulated market segments, such as OTC markets for derivatives and other structured financial products.
Ø The Task Force on Unregulated Financial Entities will examine issues surrounding unregulated entities such as hedge funds, including the development of recommended regulatory approaches to mitigate risks associated with their trading and traditional opacity.