25 November 2014

IOSCO consults on cross-border regulation

The consultation report describes three cross-border regulatory tools that have been used, or are under consideration, by IOSCO members to help address the challenges they face in protecting investors, maintaining market quality and reducing systemic risk. These tools provide the basis for developing a cross-border regulatory toolkit and common terminology describing potential options for IOSCO members to consult when considering cross-border regulations. They can be broadly classified into three main types: National Treatment, Recognition, and Passporting.

The report also includes a detailed discussion of the key challenges and experiences faced by regulators in implementing cross-border securities regulations, including how their national rules will apply to global financial markets and interact with foreign rules and international standards. In June 2013, IOSCO established the Task Force on Cross-Border Regulation (Task Force) to consider these cross-border regulatory issues and to assist policy makers and regulators in addressing the cross-border challenges they face.

To prepare the consultation report, the Task Force conducted a survey among IOSCO members from late October 2013 to April 2014. The Task Force held meetings in Hong Kong, London and Washington D.C. with industry representatives, academics, and other key stakeholders to hear their views on the issues and challenges in complying with cross-border regulations. It also received stakeholder suggestions on how regulators could enhance cross-border coordination and on a potential role for IOSCO regarding these issues.

“This is a good start to an ambitious project because of the significant diversity of approaches to cross-border regulation by different countries and markets.” said Ashley Alder, Chief Executive Officer of the Hong Kong Securities and Futures Commission and Chair of the Task Force. “We were pleased to receive encouraging support from industry as well as from fellow regulators and look forward to receiving feedback on the report.”

The consultation report aims to gather further views on experiences and understanding in connection with the use of the cross-border regulatory tools and on other cross-border issues from a broad range of stakeholders, such as members of the securities industry, representative trade bodies, market professionals, academics, regulators, self-regulatory organizations, and policy makers.

Comments should be submitted on or before 23 February 2015.

Full press release

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