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The Board of the International Organization of Securities Commissions (IOSCO) today published its 2021-2022 work program to further its core objectives of protecting investors, maintaining fair, efficient, and transparent markets, and addressing systemic risks. The work program, unlike previous editions, covers a two-year horizon and will be reviewed and refreshed as appropriate at end-2021 to ensure its ongoing relevance.
As a central tenet of its agenda, the priority to address financial stability and systemic risks in NBFI in response to the COVID-19 induced market stresses will continue to be led by the IOSCO Financial Stability Engagement Group to drive the initiatives identified under this work program. Alongside this, the COVID-19 pandemic has created economic and social situations, such as job losses, financial strains, physical and social isolation, and active online engagement, which can increase conduct risk and magnify retail investors’ susceptibility to scams and frauds. Work in this area under the second new priority will be led by the IOSCO Retail Market Conduct Task Force, while IOSCO’s Committees on Secondary Markets and Market Intermediaries will initiate joint work on operational risks.
With respect to sustainability-related issues in capital markets, the work program calls on IOSCO to re-double efforts in contributing to the urgent goal of improving the completeness, consistency, and comparability of sustainability reporting under the stewardship of its Sustainable Finance Task Force. The Task Force will also continue to progress on two other important areas covering (i) asset managers and greenwashing, and (ii) ESG ratings, and ESG data providers (please see press release on IOSCO’s work in this area).
IOSCO will also continue its efforts on six specific priorities identified by the Board for 2020, all of which will continue to be priorities in 2021 and 2022, namely (1) corporate debt and leveraged finance, (2) crypto assets, (3) market fragmentation in securities and derivatives markets, (4) artificial intelligence and machine learning, (5) passive investing and index providers and (6) retail distribution and digitalization. The 2021-2022 work program provides an update on these six existing priorities as well as an overview of the planned work on the two new priorities.
IOSCO will also further its efforts in other important areas, including matters of special importance to growth and emerging markets (GEM), the ongoing implications for securities markets of financial innovation and digitalization developments through the ICO and Fintech Networks, its collaboration with other standard setting bodies, as well as implementation monitoring, capacity building for its members and supporting investor education as a critical pillar of investor protection.
Ashley Alder, Chair of the IOSCO Board, said: “In 2020, our agenda was dominated by the response to COVID-19 induced market stresses. IOSCO has actively taken steps to address potential financial stability risks including a particular focus on non-bank financial intermediation activities. Much of this work has been led by IOSCO’s Financial Stability Engagement Group.
In 2021 and beyond, the response to the risks arising from COVID-19 will continue to be a key pillar of IOSCO’s agenda. IOSCO will also continue to focus on investor protection and market integrity, as well as examining the impacts of COVID-19 – and in particular remote working – on misconduct risks, fraud, and operational resilience. Through the work of the Sustainable Finance Task Force IOSCO will play a leading role in addressing the urgent goal of improving the completeness, consistency, and comparability of sustainability reporting. In doing so, IOSCO will further explore the establishment of a global comprehensive corporate reporting system under the IFRS Foundation.”
Notes to the Editor:
1. IOSCO is the leading international policy forum for securities regulators and is recognized as the global standard setter for securities regulation. The organization's membership regulates more than 95% of the world's securities markets in some 130 jurisdictions, and it continues to expand.
2. The IOSCO Board is the governing and standard-setting body of the International Organization of Securities Commissions and is made up of 34 securities regulators. Mr. Ashley Alder, the Chief Executive Officer of the Securities and Futures Commission of Hong Kong, is the Chair of the IOSCO Board. The members of the IOSCO Board are the securities regulatory authorities of Argentina, Australia, Bahamas, Belgium, Brazil, China, Egypt, France, Germany, Hong Kong, India, Ireland, Italy, Japan, Korea, Malaysia, Mexico, Morocco, Nigeria, Ontario, Pakistan, Portugal, Quebec, Russia, Saudi Arabia, Singapore, Spain, Sweden, Switzerland, Turkey, the United Arab Emirates, the United Kingdom, and the United States of America (both the U.S. Commodity Futures Trading Commission and U.S. Securities and Exchange Commission). The Chair of the European Securities and Markets Authority and the Chair of IOSCO´s Affiliate Members Consultative Committee are also observers.
3. The Growth and Emerging Markets (GEM) Committee is the largest committee within IOSCO, representing close to 80 per cent of the IOSCO membership, including 11 of the G20 members. Dr. Obaid Al Zaabi, Chief Executive Officer, Securities and Commodities Authority, United Arab Emirates, is the Chair of the GEM Committee. The committee brings members from growth and emerging markets together and communicates members’ views and facilitates their contribution across IOSCO and at other global regulatory discussions. The GEM Committee’s strategic priorities are focused, among others, on risks and vulnerabilities assessments, policy and development work affecting emerging markets, and regulatory capacity building.
4. IOSCO aims through its permanent structures:
· to cooperate in developing, implementing and promoting internationally recognized and consistent standards of regulation, oversight and enforcement to protect investors, maintain fair, efficient and transparent markets, and seek to address systemic risks;
· to enhance investor protection and promote investor confidence in the integrity of securities markets, through strengthened information exchange and cooperation in enforcement against misconduct and in supervision of markets and market intermediaries; and
· to exchange information at both global and regional levels on their respective experiences to assist the development of markets, strengthen market infrastructure and implement appropriate regulation.