International Organization of Securities Commissions

Definition

The International Organization of Securities Commissions (IOSCO) is an association of securities regulators from around the world that aims to establish and promote high standards of regulation in the securities markets. It plays a vital role in fostering cooperation among its members to enhance global financial stability and protect investors, while addressing challenges posed by the evolution of financial technologies and markets.

5 Must Know Facts For Your Next Test

1. IOSCO was founded in 1983 and has grown to include over 200 members from jurisdictions worldwide, representing the vast majority of the world's securities markets.
2. The organization develops international standards for securities regulation to help protect investors, ensure fair markets, and reduce systemic risk.
3. IOSCO's cooperation extends beyond just securities regulation; it works with other international organizations like the Financial Stability Board to address broader financial issues.
4. The organization has focused on developing guidance for regulators on how to address challenges posed by innovative financial products and services, especially within the FinTech space.
5. IOSCO also conducts regular assessments of member jurisdictions' regulatory frameworks, encouraging compliance with its standards to enhance investor protection globally.

Review Questions

• How does IOSCO contribute to improving global financial stability through its regulatory standards?
  • IOSCO contributes to global financial stability by establishing high regulatory standards that member jurisdictions are encouraged to adopt. By promoting consistent practices in securities regulation across countries, IOSCO helps prevent regulatory arbitrage, which can lead to systemic risks. The organization’s efforts in addressing emerging challenges, particularly in FinTech, further ensure that regulations adapt to evolving market conditions while protecting investors.
• Discuss the relationship between IOSCO and other international bodies regarding financial market regulation.
  • IOSCO collaborates closely with other international organizations, such as the Financial Stability Board, to address comprehensive financial system issues. This collaboration is essential for coordinating responses to systemic risks that cross borders and for harmonizing regulatory approaches among different jurisdictions. By working together, these organizations enhance overall market integrity and bolster investor confidence in a globally interconnected financial landscape.
• Evaluate the impact of IOSCO's guidance on member jurisdictions' approaches to regulating FinTech innovations.
  • IOSCO's guidance significantly impacts how member jurisdictions regulate FinTech innovations by providing a framework that addresses both the opportunities and risks associated with new technologies. This guidance encourages regulators to adopt a balanced approach, promoting innovation while safeguarding investor interests. By setting clear standards for how FinTech should be integrated into existing regulatory frameworks, IOSCO helps ensure that innovation does not compromise market integrity or consumer protection.

Related terms

Securities Regulation: The laws and rules that govern the securities industry, aimed at protecting investors, maintaining fair, orderly, and efficient markets.

Financial Stability Board: An international body that monitors and makes recommendations about the global financial system to promote stability and mitigate systemic risks.

FinTech: Short for financial technology, it refers to new tech that seeks to improve and automate the delivery of financial services.