31 May 2019

Financial regulators set their priorities in Sydney

Members of the International Organization of Securities Commissions (IOSCO) met at the organization┬┤s 44th Annual Meeting in Sydney hosted by ASIC to discuss priorities.

At its meeting, hosted by the Australian Securities and Investments Commission (ASIC) and attended by some 350 members, the IOSCO board considered next steps for important priority topics consistent with the IOSCO workplan for 2019. Global Legal Post highlights some of the priorities discussed.

Cypto-assets

Board members agreed to publish a consultation report on crypto-asset trading platforms, in response to a G20 request. The work aims to assist IOSCO members in evaluating the serious investor protection challenges relating to these trading platforms. Earlier this month, IOSCO launched an Emerging Digital Threats (EDT) portal for its members to enable sharing of enforcement-related information on emerging digital threats, including those arising from crypto-assets.  IOSCO will also develop material to assist regulators in educating retail investors about crypto assets.

Market fragmentation

The Board agreed to publish an IOSCO report on Market Fragmentation and Cross Border Regulation, in response to a G20 request, which analyzes how some financial markets may have experienced fragmentation in whole or in part due to regulation. The Board agreed to scope potential further work in this area and to continue its collaboration with the Financial Stability Board’s efforts on this matter. In fintech, the Board discussed the work of the IOSCO fintech network, established in May 2018 to facilitate the sharing of knowledge and experiences among IOSCO members.  The Board deliberated on next steps for the four workstreams: distributed ledger technology, ethics in artificial intelligence and machine learning, Regtech and encouraging innovation.

Data Protection

In respect to data protection, board members discussed next steps relating to an Administrative Arrangement (AA) regarding the European General Data Protection Regulation (GDPR), which was approved by the IOSCO Board, the Board of Supervisors of the European Securities and Markets Authority (ESMA) and the European Data Protection Board.  This included providing guidance to members in determining whether to sign the AA.  The AA facilitates the continued cooperation and exchange of enforcement and supervisory information under existing information sharing arrangements or memoranda, including the IOSCO Multilateral Memorandum of Understanding (MMoU) and the Enhanced-MMoU while providing safeguards for the transfer of personal data between European Economic Area (EEA) and non-EEA members. The Board noted that numerous IOSCO members have signed the AA (currently 16) and encouraged other members to consider signing.

Cyber standards

The Board agreed to publish a Cyber Task Force report that examines how IOSCO members are applying existing cyber standards or guidance in their respective regulatory regimes and identifies potential gaps in the application of these standards that may need to be addressed.

"Unique opportunity"

Ashley Alder, chair of the IOSCO board, said “The Annual Meeting in Sydney brought together the whole IOSCO membership of 225 member organizations  to focus on IOSCO´s priority activities, as set forth in the IOSCO work program for 2019, while continuing to address risks to investor protection, market integrity and financial stability.” James Shipton, chair of ASIC, added “The Annual meeting “provides a unique opportunity to discuss issues of common concern and to build the strong and effective working relationships that are crucial to an effective international regulatory environment.”