The Cross Border Regulation Forum (CBRF) has submitted a response, of which FIA Global is a co-signatory, to the International Organization of Securities Commissions (IOSCO) Consultation report on cross border regulation.
The key points of this letter are:
- Effective cross-border regulation is crucial to integrated global capital markets, financial stability and sustainable economic growth. There is scope to improve coordination going forward and the IOSCO report is an opportunity on which to capitalize.
- The CBRF agrees that there is not a ‘one-size-fits-all’ tool for regulatory coordination but believes that, of the three tools discussed by the IOSCO Report, deference (also known as recognition) has greatest the advantages to policymakers and market participants.
- Global principles, such as those championed by the G20, are necessary but not sufficient for effective global coordination. To be effective, principles have to be sufficiently granular to facilitate common interpretations and cross-border deference. Policymakers should aspire to expand agreed principles to strengthen the common foundations on which individual jurisdictions base their rules.
- In regulatory policy making, early and continuous dialogue is crucial and is a vital ingredient to successful coordination.
- More attention also needs to be paid to cross-border regulation in the legislative phase of regulatory policymaking.
- Individual jurisdictions, in the interest of better coherence and sounder financial stability, should empower IOSCO to play an enhanced role going forward in delivering on their commitments. That enhanced role should include a greater presence in promoting best practice and cross-border dialogue and in collecting and disseminating information. National policymaking processes could also be strengthened in their effectiveness by IOSCO providing support and advice.