International Organization of Securities Commissions
The International Organization of Securities Commissions (IOSCO) is an international organization that brings together the regulators of the world’s securities and futures markets. It, along with its sister organizations, the
Basel Committee on Banking Supervisionand the International Association of Insurance Supervisors, together make up the Joint Forumof international financial regulators. Currently, IOSCO members regulate more than 90 percent of the world's securities markets.
Originally formed in 1974 as the “Inter-American Conference of Securities Commissions," IOSCO's name was changed in 1983 as its membership expanded beyond North and South America. (One remnant of its early inter-American roots is that IOSCO's "official" languages are English, French, Spanish and Portuguese). IOSCO currently has 182 members, divided into three main categories:
*"Ordinary members", which must be the primary regulators of securities and/or futures markets in a jurisdiction. A stock exchange or
self-regulatory organizationmay be an ordinary member, but only if it is the jurisdiction’s primary securities regulator.
*"Associate members", which are other securities and/or futures regulators in a jurisdiction, if that jurisdiction has more than one. For example, the
Commodity Futures Trading Commissionand the North American Securities Administrators Association, Inc.in the United States and the Alberta Securities Commission and British Columbia Securities Commissionin Canada are associate members of IOSCO (with the U.S. Securities and Exchange Commissionand the Ontario Securities Commissionand L’Autorité des marchés financiers in Quebecbeing the ordinary members for the United States and Canada, respectively).
*"Affiliate members", which include stock exchanges, self-regulatory organizations, and various stock market industry associations.
Currently, IOSCO has 109 ordinary members, 11 associate members, and 62 affiliate members.
IOSCO’s ordinary and associate membership is divided into several committees. These include:
*"A Presidents’ Committee", composed of the Presidents, Chairman or senior-most representatives of all securities commissions belonging to IOSCO. It is in effect the organization’s general assembly;
*"An Executive Committee", which comprises 19 ordinary members acting under the authority of the Presidents’ Committee, and that acts as the organization’s executive decision-making body;
*"A Technical Committee", with 15 ordinary and associate members drawn primarily from the larger, more developed and more internationalized economies, whose role is to develop practical responses to major regulatory issues and study possible international standards and best practices for securities market regulation; and,
*"An Emerging Markets Committee", with 80 ordinary and associate members (plus one non-voting member, the U.S. SEC) from Latin America, Europe, Africa, the Middle East and Asia, whose role is to conduct studies on those markets and suggest ways these markets can be improved.
In addition, IOSCO has four regional committees (Europe, Inter-America, Asia-Pacific and Africa-Middle East) with members drawn from these regions, and an SRO Consultative Committee made up of stock exchanges and financial associations who offer input to the other IOSCO committees on issues of concern to the financial industry.
IOSCO (and its main committees) also have numerous specialized sub-committees (some permanent, some of limited duration) and task forces. IOSCO’s Technical Committee (arguably its most important sub-group, given the prominence of its members and its role as the organization’s “standard-setting” body) has five permanent sub-committees, each focused on a particular area of securities regulation. These sub-committees include:
*"Standing Committee 1", which focuses on accounting, auditing and corporate disclosures;
*"Standing Committee 2", which focuses on the regulation of stock exchanges;
*"Standing Committee 3", which focuses on the regulation of market intermediaries such as broker-dealers, investment banks, etc.;
*"Standing Committee 4", which focuses on cross-border securities law enforcement matters; and,
*"Standing Committee 5", which focuses on the regulation of
mutual funds and other “collective investment schemes”.
IOSCO's main committees (Executive, Technical and Emerging Markets) typically meet three times per year, in different countries depending on which member has agreed to act as host. IOSCO also has an annual meeting which, in addition to side meetings of the Executive, Technical and Emerging Markets committees, also involves a meeting of the President's Committee and typically two days of panel discussions open to the public and featuring regulators and business leaders from around the world. The 2006 annual meeting was the first week of June and was held in
Hong Kong. The 2007, 2008 and 2009 IOSCO annual conferences will be held in Mumbai, India, Paris, France, and Tel Aviv, Israel, respectively. Previous annual conferences have been held in Colombo, Sri Lanka; Amman, Jordan; and Seoul, Korea.
In addition, starting in 2004, IOSCO's Technical Committee began hosting an invitation-only conference as a way to spark discussion and dialogue between the top leaders of regulatory, investor, university and business groups. These conferences are held in cities with major stock markets, in part to facilitate attendance by top business executives and investors. Technical Committee conferences typically have a series of panels made up of some of the most prominent names in the securities industry, including the heads of major stock exchanges, current and former SEC chairmen, and the finance ministers of the host country. The first of these conferences was held in
New York, while the 2005 conference was held in Frankfurt am Main. The 2006 Technical Committee conference took place in Londonin November and the 2007 Technical Committee conference took place in Tokyo in November.
Administratively, IOSCO is run by a General Secretariat based in Madrid, Spain. IOSCO’s current Secretary General is Mr.
Greg Tanzer(a former Australian Securities and Investments Commissionofficial) and he is assisted by a relatively small group of approximately 9 professional staff.
IOSCO Executive Committee is chaired by Mrs.
Jane Diplock, chairwoman of the New Zealand Securities Commission. The Technical Committee is chaired by Monsieur Michel Prada, chairman of the French financial regulator, the Autorité des marchés financiers(AMF). The Technical Committee's Vice Chairman is Mr. Christopher Cox, chairman of the U.S. Securities and Exchange Commission. The current chairman of the Emerging Markets Committee is Mr. Shri M. Damodaran, chairman of the Securities and Exchange Board of India.
IOSCO also has several regional committees of securities commissions from particular geographical areas. These include the African-Middle East Regional Committee (chaired by
Mallam Musa Al-Fakiof the Nigerian Securites and Exchange Commission), the Asia-Pacific Regional Committee (chaired by Thirachai Phuvanatnaranubalaof the Thailand Securities and Exchange Commission), the European Regional Committee (chaired by Eddy Wymeerschof the Banking, Finance And Insurance Commission of Belgium) and the Interamerican Regional Committee (chaired by Narcisco Muñozof the Comisión Nacional de Valores of Argentina).
IOSCO’s main objective is to assist its members to:
*Cooperate together to promote high standards of regulation in order to maintain just, efficient and sound markets;
*Exchange information on their respective experiences in order to promote the development of domestic markets;
*Unite their efforts to establish standards and an effective surveillance of international securities transactions;
*Provide mutual assistance to promote the integrity of the markets by a rigorous application of the standards and by effective enforcement against offenses.
ignificant recent work
In recent years, but particularly after September 11, 2001 (which underscored how interlinked world securities markets are) and the series of large, global financial that started with Enron (and grew to include Worldcom, Parmalat, Vivendi, Royal Dutch Shell and others), IOSCO issued a series of significant principles and
best practicesthat heralded its evolution from an international “talk shop” (where little of substance was accomplished) to a serious international organization with a real impact on the securities regulation in its constituent members. This recent work includes:
*Regulatory principles designed to improve auditor independence [http://www.iosco.org/library/pubdocs/pdf/IOSCOPD134.pdf] and auditor oversight [http://www.iosco.org/library/pubdocs/pdf/IOSCOPD134.pdf] ;
*Regulatory principles for corporate financial disclosure and transparency [http://www.iosco.org/library/pubdocs/pdf/IOSCOPD132.pdf] ;
*Regulatory principles regarding conflicts of interest for financial analysts [http://www.iosco.org/library/pubdocs/pdf/IOSCOPD150.pdf] ;
*A Code of Conduct [http://www.iosco.org/library/pubdocs/pdf/IOSCOPD180.pdf ] for
credit rating agencies;
*A set of “Core Principles” [http://www.iosco.org/library/pubdocs/pdf/IOSCOPD154.pdf] for securities regulation designed to outline for IOSCO members what makes up “good” securities regulation; and, perhaps most significantly,
*A Multilateral Memorandum of Understanding [http://www.iosco.org/library/pubdocs/pdf/IOSCOPD126.pdf ] on enforcement cooperation, through which IOSCO members pledge to provide each other with collecting information and witness statements in an enforcement investigation.
IOSCO and other international organizations
IOSCO is a member of, participates as an observer in, or coordinates with a number of other international organizations, including:
Organisation for Economic Co-operation and Development
*The Financial Stability Forum
*The Joint Forum
Financial Action Task Force on Money Laundering
International Accounting Standards Board
*The Public Interest Oversight Board
International Monetary Fund
* [http://www.iosco.org IOSCO Website]
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