International Organization of Securities Commissions

The International Organization of Securities Commissions (IOSCO) refers to an international governing body that is binding multiple global securities regulators and sets the standards for the regulation of global financial markets. It upholds and fosters an international framework for fair, efficient, and orderly financial markets. It performs the function of promoting, developing, and implementing internationally acceptable standards for securities regulation.

It aids in cooperation, information sharing, and recognizable standards pertaining to securities regulation. It achieves this through technical assistance, catalyzing cooperation, and information sharing among its members. Its goal is to set an efficient and fair market, increase investor protection, and minimize systemic risk.

Its principles and objectives guide national regulations and evaluate the securities markets of its member countries. Additionally, it aims to enforce and streamline cross-border cooperation between securities regulators. It provides a stable platform for financial markets worldwide and plays a vital role in keeping the markets safe, transparent, and robust in times of turbulence and recession. Furthermore, its proactive approach has helped the growth and sustainability of the securities market, removed fraudulent market manipulation, and contributed to the economic growth of member countries.

A conglomerate of 11 securities regulatory agencies belonging to South and North America set up IOSCO in April 1983. Later, many non-American securities agencies also applied and joined it, including the United Kingdom, Indonesia, France, and South Korea. Furthermore, IOSCO established its permanent General secretariat and also conducted its first-ever conference outside the American nations in 1986. Moreover, it became incorporated as a not-for-profit legal institution under the initiative and actions of the Quebec government in 1987.

Additionally, in 1998, the organization implemented its IOSCO Principles or Objectives and Principles of Securities Regulation as the benchmark for international securities regulation. Later, in 2002, it accepted and executed the IOSCO MMoU, or Multilateral Memorandum of Understanding Concerning Consultation and Cooperation and the Exchange of Information. In 2005, it endorsed the MMOU to expand the signatories by 2010, especially to implement its principles concerning investor protection and cross-border cooperation effectively.

The board of the International Organization of Securities Commissions has formulated three main objectives by supporting their members in fulfilling them as follows:

• It works in the direction of strengthening market integrity and investor protection using the strategy of cooperation enforcement, market supervision, and information sharing.
• It promotes efficient and fair markets by ascertaining equitable access to real-time price data and market facilities.
• IOSCO promotes adequate capital requirements, effective risk management, and faster information exchange during unstable periods, helping maintain financial stability.

It consists of the following four technical committees of the International Organization of Securities Commissions as per Section 1 under the By-Laws of IOSCO as follows:

(a) The Presidents Committee

It consists of all presidents concerning associate and ordinary members or even agents meeting annually during the annual conference.

(b) The Growth and Emerging Markets Committee

It consists of more than 75% ordinary members of the IOSCO and forms the largest committees under its board.

(c)  The Regional Committees

It has members selected from the same areas, like African or American, as recognized by the president committee within Section 58, providing their perspective on the policy work and board debates.

(d) Affiliate Members Consultative Committees (AMCC)

The members of this group come from the designated group of members under the prerogative of the IOSCO board within section 65. It consists of entities performing regulatory tasks or market infrastructure, investor protection funds, or global non-governmental institutions and exchanges.

It has 240 members divided into three main types as follows:

#1 - Ordinary

It contains 132 national securities commissions or other government entities having immense control over derivatives or securities markets related to their area of jurisdiction.

#2 - Associate

It has 34 members, including entities such as intergovernmental international organizations, supranational governmental regulators, miscellaneous international standard-setting bodies, and subnational governmental regulators, as well as relevant governmental bodies, including securities markets.

#3 - Affiliate

It contains 74 members who belong to securities exchanges and international bodies besides various governmental bodies, including securities markets, self-regulatory organizations, financial market infrastructures, investor compensation, and protection funds, plus any other institution with interest in the regulation of securities.