The Board of the International Organisation of Securities Commissions (IOSCO) last Monday moved to enhance effective surveillance in capital markets across the globe  by publishing its final report on technological challenges to effective market surveillance and made necessary recommendations on how to overcome those challenges.

IOSCO is the leading international policy forum for securities regulators and is recognised as the global standard setter for securities regulation.  The organisation’s membership, including Nigerian Securities and Exchange Commission (SEC), regulates more than 95 per cent of the world’s securities markets in more than 115 jurisdictions.

It is believed that an effective surveillance regime is needed to ensure that trading in a given market is fair and orderly, and that market authorities have the ability to detect or uncover market abuse. But in recent years, technological developments in securities markets render it increasingly difficult to achieve these goals.

Hence, IOSCO   in 2011 first published a  on report on “Regulatory Issues Raised by the Impact of Technological Changes on Market Integrity and Efficiency.” And in 2012, it issued the consultation report on “Technological Challenges to Effective Market Surveillance: Issues and Regulatory Tools.”

The final report, after the consultation, was published on Monday,  which made  recommendations to help market authorities address the technological challenges facing effective market surveillance.

A statement from IOSCO made available THISDAY said this final report provided an overview of current market surveillance regimes and identifies the main challenges that technological developments pose to these regimes.

“It also makes final recommendations to help market authorities develop the regulatory tools for addressing these challenges, particularly with respect to: improving surveillance capabilities on a cross-market and cross-asset basis; and  making more useful to market authorities the data collected for surveillance purposes,” IOSCO said.

To help market authorities achieve the two goals of an effective surveillance regime, this report considers new regulatory tools for dealing with the challenges they face, including audit trail or surveillance data that permits the reconstruction of trades and order books; a single reporting point for transactions within a jurisdiction; and unique entity identifiers.

IOSCO noted that securities markets have experienced a sweeping transformation in recent years, saying the rapid technological advances and regulatory developments have produced fundamental changes in the structure of securities markets, the types of market participants, the trading strategies employed, the increase in the speed of trading and the array of products traded.

According to the body,  current surveillance techniques, including the collection, storage and accessibility of data, may need to be enhanced to capture in a timely manner all of the information necessary to monitor efficiently and effectively trading activity that occurs in the current highly automated and dispersed markets.

Source: Thisday (by Goddy Egene)