International Organization of Securities Commissions
Encyclopedia
The International Organization of Securities Commissions (IOSCO) is an association of organisations that regulate the world’s securities and futures
markets.
Members are typically the Securities Commission
or the main financial regulator from each country. IOSCO has members from over 100 different countries, who regulate more than 90 percent of the world's securities markets. The organisations role is to assist its members to promote high standards of regulation and act as a forum for national regulators to cooperate with each other and other international organisations.
IOSCO is structured into a number of committees that meet several times per year at different locations around the world and it has a permanent secretariat based in Madrid.
The securities regulators from France
, Indonesia
, Korea
and the United Kingdom
were the first agencies to join the membership from outside the Americas. The IOSCO July 1986 Paris Annual Conference was the first to take place outside of the American continents and on that occasion a decision was made to create a permanent General Secretariat for the Organization.
One remnant of its early inter-American roots is that IOSCO's "official" languages are English, French, Spanish and Portuguese.
In 1998 IOSCO started work on a number of important policies that led to broader set of guidelines. However it was the September 11, 2001 attacks
as well as a series of large global financial scandals that started with Enron
and including Worldcom, Parmalat
and Vivendi
that brought urgency to this work and heralded IOSCOs 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.
At the May 1999 annual conference, held in Lisbon
, it was decided to have a permanent headquarter for the administrative General Secretariat and that it should be based in Madrid, Spain.
In 2002 IOSCO adopted a multilateral memorandum of understanding (IOSCO MOU) designed to facilitate cross-border enforcement and exchange of information among the international community of securities regulators.
Currently, IOSCO has 199 members: 114 ordinary members, 11 associate members, and 74 affiliate members.
, Spain
. IOSCO’s current Secretary General is Mr. Greg Tanzer (a former Australian Securities and Investments Commission
official) and he is assisted by a relatively small group of approximately nine professional staff.
IOSCO also has several regional committees of securities commissions from particular geographical areas. These include the African-Middle East Regional Committee (chaired by Ms Daisy Ekineh of the Nigerian Securities and Exchange Commission who took over in acting capacity after the unceremonial exit of Mallam Musa Al-Faki whom the media labeled as lacking the wit necessary to spearhead the Nigerian capital market), the Asia-Pacific Regional Committee (chaired by Jun Kwang-Woo
of the Financial Services Commission (South Korea)
), the European Regional Committee (chaired by Eddy Wymeersch of the Banking, Finance and Insurance Commission of Belgium) and the Interamerican Regional Committee (chaired by Narcisco Muñoz of the Comisión Nacional de Valores of Argentina).
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:
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 were 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 among others.
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 London
in November and the 2007 Technical Committee conference took place in Tokyo
in November.
One of the most important relationships is with the Joint Forum
of international financial regulators. IOSCO is one of the three organisations together with its sister organizations, the Basel Committee on Banking Supervision
and the International Association of Insurance Supervisors
that make up the forum.
The IOSCO MOUs are considered the primary instruments to facilitate cross-border cooperation, reduce global systemic risk, protect investors and ensure fair and efficient securities markets.
IOSCO also adopted a comprehensive consultation policy designed to facilitate its continuous interaction with the international financial community and in particular with the industry
Futures contract
In finance, a futures contract is a standardized contract between two parties to exchange a specified asset of standardized quantity and quality for a price agreed today with delivery occurring at a specified future date, the delivery date. The contracts are traded on a futures exchange...
markets.
Members are typically the Securities Commission
Securities Commission
Securities Commission a statutory body entrusted with the responsibility of regulating and systematically developing the capital markets in Malaysia.-History:...
or the main financial regulator from each country. IOSCO has members from over 100 different countries, who regulate more than 90 percent of the world's securities markets. The organisations role is to assist its members to promote high standards of regulation and act as a forum for national regulators to cooperate with each other and other international organisations.
IOSCO is structured into a number of committees that meet several times per year at different locations around the world and it has a permanent secretariat based in Madrid.
History
IOSCO was born in 1983 from the transformation of its ancestor the ‘inter-American regional association’ (created in 1974) into a truly international cooperative body. This decision to expand the organisation beyond the Americas was made at the annual gathered in Quito, Ecuador in April 1983. At the same time the organisation was renamed to IOSCO to reflect the expanded membership beyond North and South America .The securities regulators from France
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
, Indonesia
Indonesia
Indonesia , officially the Republic of Indonesia , is a country in Southeast Asia and Oceania. Indonesia is an archipelago comprising approximately 13,000 islands. It has 33 provinces with over 238 million people, and is the world's fourth most populous country. Indonesia is a republic, with an...
, Korea
Korea
Korea ) is an East Asian geographic region that is currently divided into two separate sovereign states — North Korea and South Korea. Located on the Korean Peninsula, Korea is bordered by the People's Republic of China to the northwest, Russia to the northeast, and is separated from Japan to the...
and the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
were the first agencies to join the membership from outside the Americas. The IOSCO July 1986 Paris Annual Conference was the first to take place outside of the American continents and on that occasion a decision was made to create a permanent General Secretariat for the Organization.
One remnant of its early inter-American roots is that IOSCO's "official" languages are English, French, Spanish and Portuguese.
In 1998 IOSCO started work on a number of important policies that led to broader set of guidelines. However it was the September 11, 2001 attacks
September 11, 2001 attacks
The September 11 attacks The September 11 attacks The September 11 attacks (also referred to as September 11, September 11th or 9/119/11 is pronounced "nine eleven". The slash is not part of the pronunciation...
as well as a series of large global financial scandals that started with Enron
Enron
Enron Corporation was an American energy, commodities, and services company based in Houston, Texas. Before its bankruptcy on December 2, 2001, Enron employed approximately 22,000 staff and was one of the world's leading electricity, natural gas, communications, and pulp and paper companies, with...
and including Worldcom, Parmalat
Parmalat
Parmalat SpA is a multinational Italian dairy and food corporation. Having become the leading global company in the production of ultra high temperature milk, the company collapsed in 2003 with a €14 billion hole in its accounts in what remains Europe's biggest bankruptcy...
and Vivendi
Vivendi
Vivendi SA is a French international media conglomerate with activities in music, television and film, publishing, telecommunications, the Internet, and video games. It is headquartered in Paris.- History :...
that brought urgency to this work and heralded IOSCOs 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.
At the May 1999 annual conference, held in Lisbon
Lisbon
Lisbon is the capital city and largest city of Portugal with a population of 545,245 within its administrative limits on a land area of . The urban area of Lisbon extends beyond the administrative city limits with a population of 3 million on an area of , making it the 9th most populous urban...
, it was decided to have a permanent headquarter for the administrative General Secretariat and that it should be based in Madrid, Spain.
In 2002 IOSCO adopted a multilateral memorandum of understanding (IOSCO MOU) designed to facilitate cross-border enforcement and exchange of information among the international community of securities regulators.
Membership
IOSCO members are divided into three main categories:- Ordinary members, which must be the primary regulators of securities and or futures markets in a jurisdiction. A stock exchangeStock exchangeA stock exchange is an entity that provides services for stock brokers and traders to trade stocks, bonds, and other securities. Stock exchanges also provide facilities for issue and redemption of securities and other financial instruments, and capital events including the payment of income and...
or self-regulatory organizationSelf-regulatory organizationA self-regulatory organization is an organization that exercises some degree of regulatory authority over an industry or profession. The regulatory authority could be applied in addition to some form of government regulation, or it could fill the vacuum of an absence of government oversight and...
may be an ordinary member, but only if it is the jurisdiction’s primary securities regulator. Each ordinary member has one vote.
- 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 CommissionCommodity Futures Trading CommissionThe U.S. Commodity Futures Trading Commission is an independent agency of the United States government that regulates futures and option markets....
and the North American Securities Administrators AssociationNorth American Securities Administrators AssociationThe North American Securities Administrators Association , founded in Kansas in 1919, is the oldest international investor protection organization. NASAA is an association of state securities administrators who are charged with the responsibility to protect consumers who purchase securities or...
in the United States are associate members of IOSCO with the U.S. Securities and Exchange Commission being the ordinary members for the United States. Associate members have no vote and are not eligible for the Executive Committee; however, they are members of the Presidents' Committee.
- Affiliate members, which include stock exchanges, self-regulatory organizations, and various stock market industry associations. Affiliate members have no vote, are not eligible for the Executive Committee and are not members of the Presidents' Committee. The affiliate members, which are Self-regulatory organizationSelf-regulatory organizationA self-regulatory organization is an organization that exercises some degree of regulatory authority over an industry or profession. The regulatory authority could be applied in addition to some form of government regulation, or it could fill the vacuum of an absence of government oversight and...
(SROs), are however members of the SRO Consultative Committee.
Currently, IOSCO has 199 members: 114 ordinary members, 11 associate members, and 74 affiliate members.
Role
IOSCO’s main objectives are 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
Organization structure
The organisation is made up of a number of committees that meet several times per year at different locations around the world supported by a permanent administrative General secretariat.Leadership
Administratively, IOSCO is run by a General Secretariat based in MadridMadrid
Madrid is the capital and largest city of Spain. The population of the city is roughly 3.3 million and the entire population of the Madrid metropolitan area is calculated to be 6.271 million. It is the third largest city in the European Union, after London and Berlin, and its metropolitan...
, Spain
Spain
Spain , officially the Kingdom of Spain languages]] under the European Charter for Regional or Minority Languages. In each of these, Spain's official name is as follows:;;;;;;), is a country and member state of the European Union located in southwestern Europe on the Iberian Peninsula...
. IOSCO’s current Secretary General is Mr. Greg Tanzer (a former Australian Securities and Investments Commission
Australian Securities and Investments Commission
The Australian Securities & Investments Commission is an independent Australian government body that acts as Australia's corporate regulator...
official) and he is assisted by a relatively small group of approximately nine professional staff.
Chairman of the Executive Committee
- April 2011 - current - Maria Helena Santana, Chairperson, Securities Commission (Brazil)
- ? - May 2011 - Jane Diplock, chairwoman of the Securities Commission of New ZealandSecurities Commission of New ZealandThe Securities Commission was an independent Crown Entity of the government of New Zealand and the main regulator of investments. It was replaced on the 1 May 2011 by the Financial Markets Authority ....
Chairman of the Technical Committee
- Sep 2011 - current - Masamichi Kono, Vice Commissioner for International Affairs, Financial Services AgencyFinancial Services AgencyThe is a Japanese government organization responsible for overseeing banking, securities and exchange, and insurance in order to ensure the stability of the financial system of Japan. The agency operates with a commissioner and reports to the Minister of Finance. It oversees the Securities and...
, Japan - ? - Aug 2011 - Kathleen L. CaseyKathleen L. CaseyKathleen L. Casey was a Republican commissioner of the U.S. Securities and Exchange Commission. She was appointed by President George W. Bush and sworn in on July 17, 2006. Her term expired in August 2011.-Background:...
, a commissioner of the U.S. Securities and Exchange Commission.
Chairman of the Emerging Markets Committee
- Vedat Akgiray (Chairman, Capital Markets Board, Turkey)
IOSCO also has several regional committees of securities commissions from particular geographical areas. These include the African-Middle East Regional Committee (chaired by Ms Daisy Ekineh of the Nigerian Securities and Exchange Commission who took over in acting capacity after the unceremonial exit of Mallam Musa Al-Faki whom the media labeled as lacking the wit necessary to spearhead the Nigerian capital market), the Asia-Pacific Regional Committee (chaired by Jun Kwang-Woo
Jun Kwang-Woo
Jun Kwang-Woo is currently Chairman and Chief Executive of National Pension Service of South Korea, the 5,000-member public organization as well as the KW330 trillion fund, which is recognized as among the world's top 4 pension funds in terms of total assets.In 2008-2009, Dr...
of the Financial Services Commission (South Korea)
Financial Services Commission (South Korea)
The Financial Services Commission , formerly Financial Supervisory Commission, is South Korean government's top financial regulator. It makes financial policies, and directs the Financial Supervisory Service....
), the European Regional Committee (chaired by Eddy Wymeersch of the Banking, Finance and Insurance Commission of Belgium) and the Interamerican Regional Committee (chaired by Narcisco Muñoz of the Comisión Nacional de Valores of Argentina).
The Committees
IOSCO’s ordinary and associate membership is divided into several committees. These include:- A Presidents’ Committee, composed of the Presidents, Chairmans 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 (secondary markets);
- Standing Committee 3, which focuses on the regulation of market intermediaries such as broker-dealerBroker-dealerA broker-dealer is a term used in United States financial services regulations. It is a natural person, a company or other organization that trades securities for its own account or on behalf of its customers....
s, investment banks, etc.; - Standing Committee 4, which focuses on cross-border securities law enforcement matters;
- Standing Committee 5, which focuses on the regulation of mutual fundMutual fundA mutual fund is a professionally managed type of collective investment scheme that pools money from many investors to buy stocks, bonds, short-term money market instruments, and/or other securities.- Overview :...
s and other “collective investment schemeCollective investment schemeA collective investment scheme is a way of investing money alongside other investors in order to benefit from the inherent advantages of working as part of a group...
s” and - Standing Committee 6, dealing with credit rating agencies.
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
Hong Kong
Hong Kong is one of two Special Administrative Regions of the People's Republic of China , the other being Macau. A city-state situated on China's south coast and enclosed by the Pearl River Delta and South China Sea, it is renowned for its expansive skyline and deep natural harbour...
. The 2007, 2008 and 2009 IOSCO annual conferences were 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 among others.
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
New York
New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...
, while the 2005 conference was held in Frankfurt am Main. The 2006 Technical Committee conference took place in London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
in November and the 2007 Technical Committee conference took place in Tokyo
Tokyo
, ; officially , is one of the 47 prefectures of Japan. Tokyo is the capital of Japan, the center of the Greater Tokyo Area, and the largest metropolitan area of Japan. It is the seat of the Japanese government and the Imperial Palace, and the home of the Japanese Imperial Family...
in November.
Cooperation with other organisations
IOSCO is a member of, participates as an observer in, or coordinates with a number of other organizationsOne of the most important relationships is with the Joint Forum
Joint Forum
the Joint Forum is an international group bringing together financial regulatory representatives from banking, insurance and securities...
of international financial regulators. IOSCO is one of the three organisations together with its sister organizations, the Basel Committee on Banking Supervision
Basel Committee on Banking Supervision
The Basel Committee on Banking Supervision is a committee of banking supervisory authorities that was established by the central bank governors of the Group of Ten countries in 1975. It provides a forum for regular cooperation on banking supervisory matters. Its objective is to enhance...
and the International Association of Insurance Supervisors
International Association of Insurance Supervisors
The International Association of Insurance Supervisors is an international organisation that brings together the world's insurance supervisors and regulators.-History:The IAIS was created in 1994...
that make up the forum.
The IOSCO MOUs are considered the primary instruments to facilitate cross-border cooperation, reduce global systemic risk, protect investors and ensure fair and efficient securities markets.
IOSCO also adopted a comprehensive consultation policy designed to facilitate its continuous interaction with the international financial community and in particular with the industry
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:- The Organisation for Economic Co-operation and DevelopmentOrganisation for Economic Co-operation and DevelopmentThe Organisation for Economic Co-operation and Development is an international economic organisation of 34 countries founded in 1961 to stimulate economic progress and world trade...
- The Financial Stability BoardFinancial Stability BoardThe Financial Stability Board is an international body that monitors and makes recommendations about the global financial system. It was established after the 2009 G-20 London summit in April 2009 as a successor to the Financial Stability Forum. The Board includes all G-20 major economies, FSF...
- The Joint ForumJoint Forumthe Joint Forum is an international group bringing together financial regulatory representatives from banking, insurance and securities...
- The Financial Action Task Force on Money LaunderingFinancial Action Task Force on Money LaunderingThe Financial Action Task Force , also known by its French name, Groupe d'action financière , is an intergovernmental organization founded in 1989 on the initiative of the G7. The purpose of the FATF is to develop policies to combat money laundering and terrorist financing...
- The International Accounting Standards BoardInternational Accounting Standards BoardThe International Accounting Standards Board is an independent, privately funded accounting standard-setter based in London, England.The IASB was founded on April 1, 2001 as the successor to the International Accounting Standards Committee...
- The Public Interest Oversight BoardPublic Interest Oversight BoardThe Public Interest Oversight Board is an international body that oversees the International Federation of Accountants and seeks to improve the quality and public interest focus of the IFAC standards in the areas of audit, education, and ethics....
- The International Monetary FundInternational Monetary FundThe International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...
- The World BankWorld BankThe World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
- The European CommissionEuropean CommissionThe European Commission is the executive body of the European Union. The body is responsible for proposing legislation, implementing decisions, upholding the Union's treaties and the general day-to-day running of the Union....
Significant Policy
IOSCO adopted in 1998 a comprehensive set of Objectives and Principles of Securities Regulation (IOSCO Principles). These continue to be developed and expanded. IOSCO recommends all its members to adopt these and helps its members assess the level of compliance with the principles. These include;- Regulatory principles designed to improve auditor independence and auditor oversight
- Regulatory principles for corporate financial disclosure and transparency
- Regulatory principles regarding conflicts of interest for financial analysts
- A Code of Conduct for credit rating agencies
- A set of “Core Principles” for securities regulation designed to outline for IOSCO members what makes up “good” securities regulation
- A Multilateral Memorandum of Understanding on enforcement cooperation, through which IOSCO members pledge to provide each other with collecting information and witness statements in an enforcement investigation
See also
- Financial regulationFinancial regulationFinancial regulation is a form of regulation or supervision, which subjects financial institutions to certain requirements, restrictions and guidelines, aiming to maintain the integrity of the financial system...
- International Centre for Financial RegulationInternational Centre for Financial RegulationThe International Centre for Financial Regulation is a non-partisan organisation focused entirely on financial regulation . It is the product of a collaboration between International Financial Services institutions and the UK Government...
- List of financial regulatory authorities by country
- Securities CommissionSecurities CommissionSecurities Commission a statutory body entrusted with the responsibility of regulating and systematically developing the capital markets in Malaysia.-History:...
- Stock exchangeStock exchangeA stock exchange is an entity that provides services for stock brokers and traders to trade stocks, bonds, and other securities. Stock exchanges also provide facilities for issue and redemption of securities and other financial instruments, and capital events including the payment of income and...