Ashley Alder, Chair of the IOSCO Board, said: “IOSCO members have taken important steps this week to address the key challenges facing securities markets—including the risks around cyber security, changing market structure, and financial technology-- while also preparing markets to play a bigger role in financing the global economy.”
Strengthening the structural resilience of capital markets
In the area of audit quality, the Board discussed potential enhancements to the governance of the international audit standard-setting process that IOSCO helps to oversee. The Board stressed the importance of increasing the independence of the international standard-setting bodies and reinforcing the public interest oversight function of the standard-setting process, with a view to ensuring high-quality international auditing and ethics standards.
In the area of asset management, the Board progressed its initiatives on liquidity risk management of collective investment schemes, aimed at strengthening the resilience of this form of market-based finance. The work also forms part of IOSCO´s efforts to take forward the relevant Financial Stability Board (FSB) recommendations to address potential structural vulnerabilities related to asset management activities.
The Board agreed IOSCO should examine regulatory reforms in derivatives markets to determine whether any aspects of the reforms, while contributing to financial stability, may have had negative, unintended markets effects which may need to be addressed by regulators. The Board also discussed IOSCO´s work with the Committee on Payments and Market Infrastructures on CCP resilience and recovery issues and on the FSB initiative on CCP resolution.
To further address market issues, the IOSCO Board agreed to prepare a public statement on matters for users of Financial Benchmarks to consider when selecting Benchmarks.
Analyzing the role of securities markets and securities regulation in capital raising and sustainability issues; and the related role of securities regulation.
The Board heard a presentation from the FSB Task Force on climate-related financial disclosures and followed up with a discussion related to integrated reporting and sustainability issues.
Determining the role of regulation in financial technology and automation.
An industry representative presented for Board discussion a possible framework for the regulatory use of penetration testing, which allows firms in the financial industry to evaluate their systems and controls, identify vulnerabilities, and strengthen their infrastructure against cyber threats. The Board agreed that a careful scoping out of possible future work would be very useful.
Full press release
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