By Yakubu LAAH InvestAdvocate

Lagos (INVESTADVOCATE) – The Board of the International Organization of Securities Commissions (IOSCO) has focused on the growing risk of cybercrime in the global financial markets.

This is contained in a Statement by Yakubu Olaleye, Head Media of Nigeria’s Securities and Exchange Commission (SEC) and made available to InvestAdvocate after the 38th Annual Conference/Meeting of IOSCO held in Luxembourg.

“The Board and five external experts drawn from industry, think tanks and government agencies discussed how regulators could respond to the growing risk of cybercrime as a disruptive force in global financial markets,” the Statement said.

According to IOSCO, participants agreed that cybercrime can have a serious impact on the integrity and efficiency of global markets, the protection of investors and ultimately on trust and confidence in the financial system, thereby posing a systemic risk.

The Statement affirmed that members agreed on the importance of focusing on identifying where the biggest vulnerabilities are in financial markets and what practical mitigation measures might be possible.

Also, critical among issues at the Luxembourg meeting was the increase in the number of Africa Middle East Regional Committee (AMERC) representatives on the IOSCO Board.

IOSCO said AMERC now has two additional members on the Board, bringing to five (5) the total number of the Committees’ representatives which is a milestone achievement and a direct result of the unwavering efforts of Arunma Oteh, the AMERC Chairperson and Director General (DG) of Nigeria’s SEC.

During deliberations, board members undertook an assessment of progress made so far with respect to the G20 requests on OTC derivatives, financial benchmarks, credit rating agencies and shadow banking.

Further to this, the IOSCO Board agreed to begin work on a strategic plan for 2015-2020 (IOSCO 2020) that would define the outcomes the Commission would seek to achieve by 2020 and lay down the roadmap for meeting those outcomes.

“A key objective of this project is to identify the resources which IOSCO needs to achieve its goals and the means to finance them,” IOSCO said.

The Board also discussed the activities of its policy standard-setting committees and the initiatives to monitor the implementation of existent policy principles and recommendations.

IOSCO also discussed the progress on reform work mandated by the G20 Leaders and coordinated by the Financial Stability Board. “A draft report on IOSCO´s work on developing methodologies to identify non-bank systemically important financial institutions (non-bank SIFIs) was received,” the Statement said.

The Board heard updates on implementation of OTC derivatives reforms and the work of the OTC Derivatives Regulators Group on cross border issues – which is to meet later during the week of the conference in Paris.

On Capital Markets and Long Term Investment, the Board recognized the important contribution IOSCO and its members can make to ensuring that capital markets play a leading role in supporting long term investment in both growth and emerging and developed economies.

“This work is particularly critical following the recent call made by the G20 Leaders to identify measures to facilitate domestic capital market development and improve the intermediation of global savings for productive long-term investments,” the Statement affirmed.

Other highlights of the Luxembourg meeting was the approval of a joint statement by IOSCO and the International Finance Reporting Standards (IFRS) Foundation outlining the protocols for their cooperation on the development and implementation of IFRS.

“IOSCO has long supported the IFRS Foundation´s objectives of developing high quality and globally accepted financial reporting standards and the promotion of their use and rigorous application. It believes the development and consistent application of IFRSs will facilitate transparency within the capital markets,” the Statement said.

The Board agreed that representatives of IOSCO and the IFRS Foundation will meet within two years to review the protocols and determine whether to improve them.

Another highlight at the meeting was the IOSCO’s Board agreement to shortly publish its Risk Outlook prepared by the Committee on Emerging Risks and the IOSCO Research Department.

The document expected to be published annually is an essential element in IOSCO’s ongoing effort to identify and assess potential systemic risks in securities markets. “The Board agreed the online version of the Risk Outlook should be updated regularly,” IOSCO said.

On Investor Education and Financial Literacy, the Board noted that work had commenced on developing a strategic framework to guide IOSCO’s investor education and financial literacy agenda going forward.

There were changes to the Commission’s board composition, IOSCO’s Presidents Committee approved a proposal to increase the number of Board members by two (2) to 34 members and change some membership criteria. “The move is aimed at providing the board with a more balanced regional representation,” IOSCO said.