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21 March 2013

IOSCO consults on regulatory issues raised by changes in market structure

IOSCO published a Consultation Report on Regulatory Issues Raised by Changes in Market Structure, which identifies possible outstanding issues and risks posed by existing or developing market structures. Deadline for comments is 10 May, 2013.

In the report, IOSCO seeks to gather evidence and views for developing recommendations that promote market liquidity and efficiency, price transparency, and investors’ execution quality in a fragmented  environment. The report proposes possible policy options and regulatory tools to cope with the potential  drawbacks arising from market fragmentation.

The report concludes that securities regulators bear the responsibility for striking an appropriate balance  between a market structure that promotes competition among markets, and one that minimises the  potentially adverse effects of fragmentation on market integrity and efficiency, price formation, and best  execution of investor orders.

Accordingly, it says, an appropriately balanced market structure must provide for strong investor  protection, foster fair and efficient capital markets and confidence in those markets, and enable  businesses to raise capital for the benefit of the overall economy.

The report makes recommendations to monitor the impact of fragmentation on the following areas:

  • market integrity and efficiency
  • trade information
  • on order handling rules and best execution
  • on access to liquidity
  • market efficiency and resilience

The closing date for comments to this consultation is 10 May, 2013.

Full Consultation paper

Full press release


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