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A report published today by IOSCO indicates that implementation of IOSCO’s core Principles regarding the Regulator is high across most of the participating member jurisdictions.
The report on IOSCO Standards Implementation Monitoring on Principles 1 to 5 is based on a review of 55 IOSCO member jurisdictions from both emerging and advanced markets (ISIM Review). Principles 1 to 5 establish the desirable attributes of a regulator, emphasizing the independence and accountability of the regulator as well as the need for regulators to have adequate powers and resources. These Principles form an integral part of IOSCO’s 38 Objectives and Principles of Securities Regulation which provide core elements for securities regulation.
Jean Paul Servais, IOSCO Board Chairman and Chairman of the Belgium FSMA, said “Regulators need to have sufficient levels of independence, accountability, adequate powers and resources to deliver on the core objectives of protecting investors, ensuring fair and efficient markets and addressing systemic risks. I am therefore pleased to confirm that IOSCO's core Principles for the well-functioning of regulators are well implemented across most participating member jurisdictions. To further strengthen the ability of regulators to perform their role effectively, IOSCO will continue to help its members implement the IOSCO Principles”.
The ISIM Review noted various approaches to implement these Principles and a number of good practices have been identified in the report. At the same time, some gaps in implementation have also been observed, notably in emerging and frontier market jurisdictions. These gaps cover operational independence, lack of a stable and continuous source of funding, adequate legal protection, or adequate human resources to carry out the Regulator’s duties. Gaps are also observed regarding lack of clear guidance for disclosure of conflicts of interest, or for procedural fairness and confidentiality standards.
Sharon Kelly, Chair of the IOSCO Assessment Committee, said “The work of the Assessment Committee is critical to IOSCO and its members. Unless implemented, issuing international standards remains ineffective. While the ISIM Review identified a number of good practices from various jurisdictions, work remains to be done to fully implement the IOSCO Principles. We therefore call on members to address the shortcomings identified in our report in the near future to ensure the maximum implementation of these important Principles so that they can carry out their responsibilities effectively.”
