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The Board of the International Organization of Securities Commissions (IOSCO) today published its Thematic Review of the Implementation on the Timeliness and Frequency of Disclosure to Investors according to Principles 16 and 26 of the IOSCO Objectives and Principles of Securities Regulation.
The report sets out the findings of the Thematic Review about the timeliness and frequency of disclosure by issuers and collective investment schemes (CIS) under Principles 16 and 26 of IOSCO’s Objectives and Principles of Securities Regulation (IOSCO Principles). Timely and frequent disclosure of information material to investment decisions is crucial for investor protection and fostering fair, efficient and transparent markets.
Thirty-seven jurisdictions participated in the review, which was conducted by the IOSCO Assessment Committee.
The objective of the review was to describe the current range of regulatory approaches of participating jurisdictions in the implementation of:
- IOSCO Principle 16 relating to issuers. The principle states that there should be full, accurate and timely disclosure of financial results, risk and other information that is material to investors’ decisions; and
- IOSCO Principle 26 relating to CIS. The principle states that regulation should require disclosure, which is necessary to evaluate the suitability of a CIS for a particular investor and the value of the investor’s interest in the scheme.
The scope was limited to periodic and material event-based disclosure frameworks in participating jurisdictions, in relation to issuers.
In relation to disclosure under Principle 16, the review found differences around whether and when information is required to be disclosed. Requirements varied according to the type of issuer and the type of information.
In relation to disclosure under Principle 26, the review found that timely disclosure requirements on value, risk reward profile and costs of CIS were in place for all jurisdictions. This is achieved mostly through updates to prospectuses or other offering documents. Information is given as soon as significant changes occur that may affect the valuation of a CIS or that can influence an investor’s decision to either subscribe or redeem CIS units or shares.
A number of interrelated issues that emerged from this review may need further consideration by IOSCO. Where appropriate, IOSCO may undertake additional analysis and, accordingly, determine whether further policy guidance and potential improvements or revisions to the IOSCO Methodology — For Assessing Implementation of the IOSCO Objectives and Principles of Securities Regulation are warranted.
