By Yakubu LAAH InvestAdvocate
Lagos (INVESTADVOCATE)-The International Organization of Securities Commissions (IOSCO) Wednesday unveiled eight (8) principles on the protection of client assets.
IOSCO in a Statement made available to InvestAdvocate says the final report on recommendations regarding the protection of client assets seeks to help regulators improve the supervision of intermediaries holding client assets.
According to IOSCO, events such as the Lehman Brothers and MF Global insolvencies have placed client asset protection regimes in the spotlight. ‘’This is the result of investors trying to better understand the potential implications of placing their assets with particular intermediaries and in certain jurisdictions,’’ IOSCO said.
Similarly, world’s securities commission said regulators also have been seeking to address risks to client assets and how to transfer or return client assets in default, resolution or insolvency scenarios.
IOSCO affirmed that the eight (8) principles published today provides guidance to regulators on how to enhance their supervision of intermediaries holding client assets by clarifying the roles of the intermediary and the regulator in protecting those assets.
It further affirmed that many jurisdictions have rules and regulations governing client assets, although their protection regimes may vary across these jurisdictions. ‘’The report outlines the intermediary’s responsibility to ensure compliance with these rules, including through the development of risk management systems and internal controls to monitor compliance,’’ IOSCO said.
The world’s securities commission said where the intermediary places client assets with third parties, the intermediary should reconcile the client´s accounts and records with those of the third party. ‘’While the intermediary must comply with the client asset protection regimes, the regulator has a role in supervising the intermediary’s compliance with the applicable domestic rules and maintaining a regime that promotes effective safeguarding of client assets, according to the report,’’ it said.
The global securities regulator said it received 21 public responses to the consultation report on protection of client assets which was published in February 2013. ‘’A Feedback Statement summarizing the major issues in the comment letters and the collated responses to the most recent survey on client asset protection were also published today with the final report,’’ IOSCO said.
