By Peter OBIORA InvestAdvocate
Lagos (INVESTADVOCATE)- The board of the International Organisation of Securities Commissions (IOSCO) on Wednesday said it has agreed to continue to work on a new enhanced Multilateral Memorandum of Understanding (MMoU) to help combat cross-border fraud and misconduct.
Greg Medcraft, board chairman of IOSCO said this at its annual conference public session focusing on the themes of enforcement, corporate governance, long-term financing for economic growth, and investor protection and education as drivers of investor confidence.
Medcraft said the new enhanced MMoU on cooperation and the exchange of information would gradually replace the current MMoU which was adopted in 2002. “Work is continuing on an enhanced MMoU to make it an even more effective instrument by factoring in the use of technology and other recent developments,” he said.
“The markets we regulate are becoming increasingly important sources of finance driving global economic growth. Our work agenda continues to be about building trust and confidence in global capital markets which are fair, efficient, transparent and free of systemic risk,” Medcraft affirmed.
At the conference some key initiatives were advocated by securities regulators to help restore trust in securities markets through investor protection, address systemic risks and to allow markets to play their role in furthering economic growth.
These include steps to finalise the methodologies for identifying non-bank non-insurance systemically important financial institutions (NBNI SIFIs) in the market intermediary and asset management space, working with the Basel Committee on Banking Supervision to support the development of sustainable securitisation markets as an important source of funding for the real economy.
Others are strengthening audit quality through investigating the important role of audit committees in improving audit quality, strengthening IOSCO’s cooperation with other strategic partners, like the International Forum of Independent Audit Regulators (IFIAR) and contributing to reforms considered necessary in order to further strengthen the public interest in the Audit-Related Standard Setting Governance.
Also, the global securities regulator advocated taking forward the work on credible deterrence through the development of effective enforcement regimes. “A paper will be issued that describes the key factors of a credible deterrence framework that act to dissuade potential wrongdoers from engaging in misconduct,” the IOSCO board said.
Other key initiatives to help restore trust in securities markets are examining how markets can play their role as a source of financing for small and medium enterprises (SMEs) and continuous work on developing a tool kit of regulatory measures to address cross border issues, with a consultation paper to be published later this year.
The board also agreed for IOSCO to carry out work on the voluntary termination of collective investment schemes and to examine the products offered by credit rating agencies other than issuer or subscriber-paid credit ratings and to advance a cross-sectoral initiative to address cyber risks in financial markets and agreed to further work aimed at improving the identification of emerging risks.
The global securities regulator said these initiatives are consistent with the current G20 efforts on regulatory reform and encouraging economic growth.
IOSCO further affirmed it was conscious of the central role of market based financing in furthering economic growth.
Similarly, IOSCO’s Growth and Emerging Market Committee, the largest of IOSCO’s committees with 90 members, also met during the week and reinforced the importance of strengthening collective regulatory capacity, including in systemic risk management and contingency planning.
“We will continue to intensify our efforts to strengthen the capital market’s resilience against short-term volatility, while focusing on initiatives to build capital markets that can promote sustainable and inclusive growth. I welcome the IOSCO Presidents Committee’s endorsement of the proposal to raise fees temporarily for permanent Board members to be channelled towards capacity building. This will allow us to begin ramping up our collective capacity building efforts,” Ranjit Ajit Singh, the GEM Committee Chair said.
