The International experience of regulators in developing and implementing cross-border regulations in globalized securities markets has highlighted the challenges they face in ensuring the effectiveness of domestic regulation, without unduly constraining the cross-border offering of financial services or products. In June 2013, the International Organization of Securities Commissions (IOSCO) established the Task Force to assist policy-makers and regulators in addressing these challenges and to consider in detail cross-border regulatory issues.

 

The final report indicates that cross-border regulation is moving towards more engagement via different forms of recognition to solve regulatory overlaps, gaps, and inconsistencies. While the increased engagement is mostly bilateral at this stage, multilateral engagement is likely to develop further as markets continue to grow and emerge around the world and with the greater use of supervisory Memoranda of Understandings.

 

The report provides a detailed resource for regulators. It includes a toolkit of three broad types of cross-border regulatory options, supporting case studies, a description of the processes used to assess comparability of foreign regulatory regimes, and considerations on the application of the toolkit. These better equip regulators and policy-makers to develop, implement, and evaluate cross-border regulatory approaches.

 

The report’s analysis and findings are based on a survey across the IOSCO membership regarding their regulatory approaches to cross-border financial activities involving, among others, market intermediaries, securities exchanges and markets, collective investment schemes, and financial market infrastructures. Emphasis was placed on the underlying rationale, experiences, and challenges of developing and implementing these approaches.

 

The Task Force also conducted three roundtable meetings in Hong Kong, London, and Washington D.C., as well as a public consultation, to gather views from the industry and other stakeholders. Extensive input were received regarding the challenges in complying with cross-border regulations, and how IOSCO can facilitate the development and implementation of cross-border regulatory tools, and enhance coordination among member regulators.

 

Press release

 

Full report