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Wednesday,
April 08, 2020 / 11:10 AM / By IOSCO / Header
Image Credit: Ecographics
The Board of the International Organization of
Securities Commissions (IOSCO) has agreed to pause or delay some of its work in
2020 in order to redirect its resources to focus on the multiple challenges
securities markets regulators are addressing as a result of the COVID-19
crisis.
This decision means that the work priorities
outlined in IOSCO's 2020 annual work
program needed to be reconsidered. In deciding on
which priorities to pause or delay, the Board was guided by four overarching
principles:
1. A
recognition that a delay would relieve untoward pressure on IOSCO members
who are addressing core crisis challenges;
2. A recognition
that operational constraints on financial institutions would likely impede
their ability to contribute to IOSCO projects and/or follow up on final
reports;
3. A
recognition that in many cases it may be inappropriate to issue reports during
this crisis given that they may become wholly or partly overtaken by
events and/or they would need to be modified to take account of lessons
learned or factor in a substantially changed financial landscape as a result of
the crisis; and
4. A
recognition that IOSCO, the Financial Stability Board and other Standard
Setting Bodies with whom IOSCO collaborates are focusing substantial efforts
(which is resource intensive) to address the crisis which is now the
priority.
In view of these principles, the Board agreed to
redeploy resources to focus primarily on matters that are directly impacted by
COVID-19. Among other things, substantial resources are being devoted to
addressing areas of market-based finance which are most exposed to heightened
volatility, constrained liquidity and the potential for pro-cyclicality. These
efforts include examining investment funds, as well as margin and other risk
management aspects of central clearing for financial derivatives and other
securities. A limited number of other work streams that are close to
completion will continue, as will work related to G-20 deliverables. The
timelines for the projects in relation to asset management linked to FSB
recommendations will be coordinated with the FSB.
The work being delayed or paused includes IOSCO's
analysis of the use of Artificial Intelligence and Machine Learning by market
intermediaries and asset managers, the impact of the growth of passive
investing and potential conduct-related issues in index provision, issues
around market data, outsourcing and implementation monitoring - all of which
would have involved outreach to the industry and supervisors. However, IOSCO
will continue to proceed with its work on good practices for deference, as well
as other projects that are near completion which will not burden limited
regulatory or industry resources. IOSCO will also examine any specific investor
protection issues, market integrity or conduct risks that may arise in the
context of the COVID - 19 crisis.
This reprioritization confirms IOSCO's ongoing
commitment to protect investors, maintain fair, efficient and transparent
markets and mitigate systemic risks.
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