The International Organization of Securities Commissions (IOSCO) is an international organization that brings together the regulators of the world’s securities and futures markets. It, along with its sister organizations, the Basel Committee on Banking Supervision and the International Association of Insurance Supervisors, together make up the Joint Forum of international financial regulators. Currently, IOSCO members regulate more than 90 percent of the world's securities markets.

Originally formed in 1974 as the “Inter-American Conference of Securities Commissions," IOSCO's name was changed in 1983 as its membership expanded beyond North and South America. (One remnant of its early inter-American roots is that IOSCO's "official" languages are English, French, Spanish and Portuguese). IOSCO members are divided into three main categories:

• Ordinary members, which must be the primary regulators of securities and/or futures markets in a jurisdiction. A stock exchange or self-regulatory organization may be an ordinary member, but only if it is the jurisdiction’s primary securities regulator. Each ordinary member has one vote.^[1]

• Associate members, which are other securities and/or futures regulators in a jurisdiction, if that jurisdiction has more than one. For example, the Commodity Futures Trading Commission and the North American Securities Administrators Association in the United States and the Alberta Securities Commission and British Columbia Securities Commission in Canada are associate members of IOSCO (with the U.S. Securities and Exchange Commission and the Ontario Securities Commission and L’Autorité des marchés financiers in Quebec being the ordinary members for the United States and Canada, respectively). Associate members have no vote and are not eligible for the Executive Committee; however, they are members of the Presidents' Committee.^[2]

• Affiliate members, which include stock exchanges, self-regulatory organizations, and various stock market industry associations. Affiliate members have no vote, are not eligible for the Executive Committee and are not members of the Presidents' Committee. The affiliate members, which are SROs, are however members of the SRO Consultative Committee.^[3]

Currently, IOSCO has 182 members: 109 ordinary members, 11 associate members, and 62 affiliate members.

Contents 1 Organization 2 History 3 Leadership 4 Role 5 Significant recent work 6 IOSCO and other international organizations 7 References 8 External links

[edit] Organization

IOSCO’s ordinary and associate membership is divided into several committees. These include^[4]:

• A Presidents’ Committee, composed of the Presidents, Chairmans or senior-most representatives of all securities commissions belonging to IOSCO. It is in effect the organization’s general assembly;

• An Executive Committee, which comprises 19 ordinary members acting under the authority of the Presidents’ Committee, and that acts as the organization’s executive decision-making body;

• A Technical Committee, with 15 ordinary and associate members drawn primarily from the larger, more developed and more internationalized economies, whose role is to develop practical responses to major regulatory issues and study possible international standards and best practices for securities market regulation; and,

• An Emerging Markets Committee, with 80 ordinary and associate members (plus one non-voting member, the U.S. SEC) from Latin America, Europe, Africa, the Middle East and Asia, whose role is to conduct studies on those markets and suggest ways these markets can be improved.

In addition, IOSCO has four regional committees (Europe, Inter-America, Asia-Pacific and Africa-Middle East) with members drawn from these regions, and an SRO Consultative Committee made up of stock exchanges and financial associations who offer input to the other IOSCO committees on issues of concern to the financial industry.

IOSCO (and its main committees) also have numerous specialized sub-committees (some permanent, some of limited duration) and task forces. IOSCO’s Technical Committee (arguably its most important sub-group, given the prominence of its members and its role as the organization’s “standard-setting” body) has five permanent sub-committees, each focused on a particular area of securities regulation. These sub-committees include^[5]:

• Standing Committee 1, which focuses on accounting, auditing and corporate disclosures;
• Standing Committee 2, which focuses on the regulation of stock exchanges (secondary markets);
• Standing Committee 3, which focuses on the regulation of market intermediaries such as broker-dealers, investment banks, etc.;
• Standing Committee 4, which focuses on cross-border securities law enforcement matters; and,
• Standing Committee 5, which focuses on the regulation of mutual funds and other “collective investment schemes”.

IOSCO's main committees (Executive, Technical and Emerging Markets) typically meet three times per year, in different countries depending on which member has agreed to act as host. IOSCO also has an annual meeting which, in addition to side meetings of the Executive, Technical and Emerging Markets committees, also involves a meeting of the President's Committee and typically two days of panel discussions open to the public and featuring regulators and business leaders from around the world. The 2006 annual meeting was the first week of June and was held in Hong Kong. The 2007, 2008 and 2009 IOSCO annual conferences will be held in Mumbai, India, Paris, France, and Tel Aviv, Israel, respectively. Previous annual conferences have been held in Colombo, Sri Lanka; Amman, Jordan; and Seoul, Korea.

In addition, starting in 2004, IOSCO's Technical Committee began hosting an invitation-only conference as a way to spark discussion and dialogue between the top leaders of regulatory, investor, university and business groups. These conferences are held in cities with major stock markets, in part to facilitate attendance by top business executives and investors. Technical Committee conferences typically have a series of panels made up of some of the most prominent names in the securities industry, including the heads of major stock exchanges, current and former SEC chairmen, and the finance ministers of the host country. The first of these conferences was held in New York, while the 2005 conference was held in Frankfurt am Main. The 2006 Technical Committee conference took place in London in November and the 2007 Technical Committee conference took place in Tokyo in November.

[edit] History

IOSCO was born in 1983 from the transformation of its ancestor inter-American regional association (created in 1974) into a truly international cooperative body. Eleven securities regulatory agencies from North and South America gathered in Quito, Ecuador in April 1983 to take that important decision.

In 1984, securities regulators from France, Indonesia, Korea and the United Kingdom were the first agencies to join the membership from outside the Americas. The IOSCO July 1986 Paris Annual Conference was the first to take place outside of the American continents. On that occasion a decision was made to create a permanent General Secretariat for the Organization.

Today IOSCO is recognized as the international standard setter for securities markets. The Organization's wide membership regulates more than 90% of the world's securities markets and IOSCO is the world's most important international cooperative forum for securities regulatory agencies. IOSCO members regulate more than one hundred jurisdictions and the Organization's membership is steadily growing.

IOSCO adopted in 1998 a comprehensive set of Objectives and Principles of Securities Regulation (IOSCO Principles), which are today recognized as the international regulatory benchmarks for all securities markets. The Organization endorsed in 2003 a comprehensive methodology (IOSCO Principles Assessment Methodology) that enables an objective assessment of the level of implementation of the IOSCO Principles in the jurisdictions of its members and the development of practical action plans to correct identified deficiencies.

In 2002 IOSCO adopted a multilateral memorandum of understanding (IOSCO MOU) designed to facilitate cross-border enforcement and exchange of information among the international community of securities regulators.

In 2005 the Organization endorsed the IOSCO MOU as the benchmark for international cooperation among securities regulators and set-out clear strategic objectives to rapidly expand the network of IOSCO MOU signatories by 2010. It approved as an unambiguous operational priority the effective implementation - in particular within its wide membership - of the IOSCO Principles and of the IOSCO MOU, which are considered as primary instruments to facilitate cross-border cooperation, reduce global systemic risk, protect investors and ensure fair and efficient securities markets. IOSCO also adopted a comprehensive consultation policy designed to facilitate its continuous interaction with the international financial community and in particular with the industry.^[6]

[edit] Leadership

Administratively, IOSCO is run by a General Secretariat based in Madrid, Spain (in may of 1999, at the annual conference at Lisbon, it was selected to be the permanent headquarter). IOSCO’s current Secretary General is Mr. Greg Tanzer (a former Australian Securities and Investments Commission official) and he is assisted by a relatively small group of approximately 9 professional staff.

IOSCO Executive Committee is chaired by Mrs. Jane Diplock, chairwoman of the New Zealand Securities Commission. The Technical Committee is chaired by Ms. Kathleen L. Casey, a commissioner of the U.S. Securities and Exchange Commission. The current chairman of the Emerging Markets Committee is Mr. Guillermo Larrain (Chairman, Superintendencia de Valores y Seguros, Chile)^[7]

IOSCO also has several regional committees of securities commissions from particular geographical areas. These include the African-Middle East Regional Committee (chaired by Ms Daisy Ekineh of the Nigerian Securites and Exchange Commission who took over in acting capacity after the unceremonial exit of Mallam Musa Al-Faki who the media labeled as lacking the wit necessary to spearhead the Nigerian capital market ), the Asia-Pacific Regional Committee (chaired by Jun Kwang-Woo of the Financial Services Commission (South Korea)), the European Regional Committee (chaired by Eddy Wymeersch of the Banking, Finance And Insurance Commission of Belgium) and the Interamerican Regional Committee (chaired by Narcisco Muñoz of the Comisión Nacional de Valores of Argentina).

[edit] Role

IOSCO’s main objective is to assist its members to:

• Cooperate together to promote high standards of regulation in order to maintain just, efficient and sound markets;

• Exchange information on their respective experiences in order to promote the development of domestic markets;

• Unite their efforts to establish standards and an effective surveillance of international securities transactions;

• Provide mutual assistance to promote the integrity of the markets by a rigorous application of the standards and by effective enforcement against offenses.

[edit] Significant recent work

In recent years, but particularly after September 11, 2001 (which underscored how interlinked world securities markets are) and the series of large, global financial scandals that started with Enron (and grew to include Worldcom, Parmalat, Vivendi, Royal Dutch Shell and others), IOSCO issued a series of significant principles and best practices that heralded its evolution from an international “talk shop” (where little of substance was accomplished) to a serious international organization with a real impact on the securities regulation in its constituent members. This recent work includes:

• Regulatory principles designed to improve auditor independence [1] and auditor oversight [2];

• Regulatory principles for corporate financial disclosure and transparency [3];

• Regulatory principles regarding conflicts of interest for financial analysts [4];

• A Code of Conduct [5] for credit rating agencies;

• A set of “Core Principles” [6] for securities regulation designed to outline for IOSCO members what makes up “good” securities regulation; and, perhaps most significantly,

• A Multilateral Memorandum of Understanding [7]on enforcement cooperation, through which IOSCO members pledge to provide each other with collecting information and witness statements in an enforcement investigation.

[edit] IOSCO and other international organizations

IOSCO is a member of, participates as an observer in, or coordinates with a number of other international organizations, including:

• The Organisation for Economic Co-operation and Development
• The Financial Stability Forum
• The Joint Forum
• The Financial Action Task Force on Money Laundering
• The International Accounting Standards Board
• The Public Interest Oversight Board
• The International Monetary Fund
• The World Bank
• The European Commission

[edit] References

1. ^ http://www.iosco.org/about/index.cfm?section=categories About IOSCO - Categories & Contributions of Members
2. ^ http://www.iosco.org/about/index.cfm?section=categories About IOSCO - Categories & Contributions of Members
3. ^ http://www.iosco.org/about/index.cfm?section=categories About IOSCO - Categories & Contributions of Members
4. ^ http://www.iosco.org/about/index.cfm?section=structure About IOSCO - Structure
5. ^ http://www.iosco.org/about/index.cfm?section=workingcmts About IOSCO - Working Committees
6. ^ http://www.iosco.org/about/index.cfm?section=history About IOSCO - Historical background
7. ^ http://www.iosco.org/lists/display_committees.cfm?cmtid=10 IOSCO Members' lists- Emerging Markets Committee Advisory Board members

[edit] External links

• IOSCO Website
• IOSCO Resolutions
• Multilateral Memorandum of Understanding Concerning Consultation and Cooperation and the Exchange of Information May, 2002, IOSCO
• List of Signatories to the IOSCO Multilateral Memorandum of Understanding Concerning Consultation and Cooperation and the Exchange Of Information IOSCO