By Peter OBIORA InvestAdvocate
Lagos (INVESTADVOCATE)-Global Securities regulator, the International Organisation of Securities Commissions (IOSCO) said on Tuesday it has published two (2) consultation reports aimed at further enhancing the ability of financial markets and intermediaries to manage risks, withstand catastrophic events, and swiftly resume their services in the event of disruption.
According to IOSCO, the first report Mechanisms for Trading Venues to Effectively Manage Electronic Trading Risks and Plans for Business Continuity provide a comprehensive overview of the steps trading venues take to manage the risks associated with electronic trading and the ways they plan for and manage disruptions through business continuity plans. “As technology continues to evolve, trading venues will need to continuously adapt to these changes,” IOSCO said.
The world securities regulator says the report provides recommendations to help regulators ensure that trading venues are able to manage effectively a broad range of evolving risks.
In the same vein, it proposes sound practices that should be considered by trading venues when developing and implementing risk mitigation mechanisms and business continuity plans aimed at safeguarding the integrity, resiliency and reliability of their critical systems.
While the second report Market Intermediary Business Continuity and Recovery Planning, proposes standards and sound practices that regulators could consider as part of their oversight of the business continuity and recovery planning by market intermediaries.
IOSCO affirmed that these sound practices may also prove useful to intermediaries who are developing and implementing business continuity plans.
“Recent disruptive events and emerging threats in major international financial markets highlighted the need to examine and identify the key measures and arrangements in place at trading venues and market intermediaries to restore their “critical” functions should a disruption occur. In doing so, the reports also considered the 2006 Joint Forum Report High-level Principles for Business Continuity,” IOSCO added.
The world securities regulator further affirmed that a key objective of the reports is to address possible weaknesses or gaps in the business continuity plans and recovery strategies of trading venues and market intermediaries.
