17 January 2022

IOSCO good practices aim to foster cooperation through global supervisory colleges

The report Lessons Learned from the Use of Global Supervisory Colleges provides a framework forsecurities regulators seeking to create new global supervisory colleges for sectors of financial marketswhere they are not currently used...

The Board of the International Organization of Securities Commissions (IOSCO) today published a
set of good practices related to the use of global supervisory colleges in securities markets, with the
aim of increasing cooperation and information-sharing among securities regulators.

The report Lessons Learned from the Use of Global Supervisory Colleges provides a framework for
securities regulators seeking to create new global supervisory colleges for sectors of financial markets
where they are not currently used, which could strengthen cooperation between regulatory authorities
and further assist regulators in addressing the adverse effects of market fragmentation.
The report is based on previous IOSCO work on market fragmentation and builds upon the
experiences of IOSCO members with supervisory colleges for such entities as credit rating agencies
and CCPs.

In its earlier reports, IOSCO identified supervisory colleges as one of the collaborative mechanisms
that securities regulators could use to obtain a more complete picture of an internationally active
market participant. IOSCO members participating in supervisory colleges said they gained access to
higher quality information, enabling them to better identify and assess risks stemming from the
operations of a supervised entity.

The 14 good practices cover matters such as general purpose, membership, governance, multilateral

confidentiality arrangements and the cross-border operations of supervisory colleges. Based on

member feedback, the good practices also encourage the use of supervisory colleges to share

information and solutions in times of crises.

The Report calls for the use of” core-extended” structures where circumstances allow. This

arrangement would allow all relevant authorities – including those from emerging jurisdictions – to

participate in information exchange about a supervised entity appropriately.

Finally, the Report considers sectors of securities markets where the use of supervisory colleges could

be expanded; building on (i) considerations such as interconnectedness where market participants may

be doing business across multiple jurisdictions and/or conduct activities which could have spill-over

effects on other jurisdictions; and (ii) new emerging areas where supervisory knowledge may not yet

have been fully developed. Based on these criteria, some IOSCO members have suggested there may

be merit in making use of supervisory colleges for market intermediaries, financial benchmarks

administrators, crypto-asset platforms and asset management

© IOSCO