TTSEC attends IOSCO Board Meeting in Sydney, Australia

From March 21-22, the Trinidad and Tobago Securities and Exchange Commission attended the International Organization of Securities Commissions (IOSCO) Board Meeting held in Sydney, Australia. Representing the Commission were Professor Patrick Watson, Chairman and Mr. Norton Jack, General Counsel/General Manager (Ag.). On return from the very important meeting, both Professor Watson and Mr Jack reiterated the point that attendance at these meetings is mandatory for the TTSEC since the TTSEC sits on the IOSCO Board until 2014 and is also the third representative of the Inter-American Regional Committee. Here are some of the highlights from the meeting:

New IOSCO Chairman of the Board

Mr. Greg Medcraft, Chair of the Australian Securities and Investments Commission, took over as chair of the International Organization of Securities Commissions (IOSCO) Board at the March 21-22 Meeting.  He succeeds Mr. Masamichi Kono of the Japan FSA. The Board also elected Ontario Securities Commission Chairman, Mr. Howard I. Wetston as IOSCO Vice Chair following the retirement of Mr. Ethiopis Tafara. In his first statement as Chairman, Mr. Medcraft said “I am delighted to be appointed Chair of IOSCO and I salute and thank Masa Kono for his leadership of IOSCO. Under my stewardship, I want to build on Mr. Kono’s work and ensure IOSCO is proactive and forward-looking in delivering three objectives – working to ensure that globally investors are confident and informed, markets are fair and efficient and reducing systemic risk.” Mr. Medcraft said that during his term as chair IOSCO will work toward these objectives through:

  • Engagement with members and stakeholders;
  • Co-operation across its membership and with industry; and
  • Standard-setting.

The Sydney IOSCO Board meeting also covered the following areas:


The Board meeting underscored IOSCO’s commitment to improving engagement with industry and the broader IOSCO membership.

 Industry Round Table on Emerging Risks

The meeting was preceded by a Round Table attended by the Board and seven financial services executives from Australia, Asia, Europe and North America to discuss emerging risks. The discussions underscored IOSCO´s determination to engage with industry in developing early and forward-looking responses to the challenges that securities markets face in a rapidly evolving environment. Participants exchanged views on emerging risks in global financial markets and the possible unintended consequences of securities regulation and other policy measures, particularly on emerging markets. Some of the potential risks discussed included the global imbalances caused by capital flows, weaknesses in financial market infrastructure, high-frequency trading, market fragmentation and cyber-attacks

Board members expressed concern over the potential risks of the current low interest rate environment. Members generally agreed the search for yield could fuel the creation of new asset bubbles, particularly in emerging markets with largely undiversified economies. They noted that a sudden upward spike in interest rates could damage global economic growth.

The Emerging Markets Committee (EMC)

The Board discussed measures to enhance the inclusiveness of EMC members in IOSCO policy and implementation work. The EMC accounts for 75% of IOSCO membership, which gives it significant responsibility for the development and implementation of IOSCO standards on a global level. Board members agreed that the emerging markets would play an increasingly important role as a source of financing for the global economy.

Board membership and working procedures

The Meeting had preliminary discussions on changes to the composition of the IOSCO Board and its working procedures.  The aim of these changes is to ensure the Board is as inclusive and representative as possible of the IOSCO membership.  The Board was established in May 2012 through the merger of the Executive Committee, the Technical Committee and the Emerging Market Committee Advisory Board. The aim is to have in place a permanent basis for determining Board membership by the time of the Annual meeting in Rio de Janeiro in September 2014.

New IOSCO members

The Board approved and welcomed the following institutions as affiliate members of IOSCO:

  • Union of Arab Securities Authorities  (UASA)
  • Johannesburg Stock Exchange (JSE)
  • Nigeria Stock Exchange (NSE)
  • The International Swaps and Derivatives Association (ISDA)


IOSCO’s ongoing commitment to enhancing constructive co-operation across its members was reflected in a number of new initiatives agreed at the meeting.

Establishing the IOSCO Foundation

The Board discussed the governance framework for the Foundation and discussed the location of the Foundation.  Board members supported physically locating the Foundation in Madrid, as efforts continue to secure funding commitments. A final decision on all aspects of the Foundation will be made and the next steps for formally filing the Foundation documents will be taken after completion of the pre-commitment phase and thorough examination of all legal issues.

Multilateral Memorandum of Understanding on the exchange of information

The Board considered additional measures to encourage non-signatory members to sign the IOSCO Multilateral Memorandum of Understanding on cooperation and exchange of information, the instrument used by securities regulators around the world to combat cross-border fraud and misconduct. It also reiterated IOSCO’s commitment to provide technical assistance and political support to those non-signatories that require it in order to sign the MMoU. Earlier this month, the Reserve Bank of Malawi signed the MMoU, bringing to 94 the total number of IOSCO member signatories. Together these members regulate about 95% of the world’s securities markets. However, 30 members have yet to become signatories.  As long as these jurisdictions remain outside the international enforcement regime, they offer potential safe havens for wrong doers and create gaps in IOSCO’s international enforcement network.

Financial Benchmarks

 The Board discussed the draft principles on financial benchmarks developed by the Task Force on Financial Market Benchmarks. The principles include high level principles that are applicable to all benchmarks and additional principles that are applied under specific circumstances. The Board agreed to issue a second consultation paper focusing primarily on the additional, more detailed principles.  The consultation paper is expected to be released for a four-week comment period during April.  The final report is expected to be published in June.

G20/FSB mandates to repair the financial system

 The Board discussed progress in reform work mandated by the G20 Leaders and coordinated by the Financial Stability Board. The meeting heard updates on OTC derivatives reform initiatives and implementation issues, progress on joint IOSCO-BCBS (Basel Committee on Banking Supervision) work on Margin Requirements for non-centrally cleared derivatives, the need for further work on credit rating agencies and on credit default swaps.

 Adapted from: