The Power and Influence of IOSCO in Formulating and Enforcing Securities Regulations
Asper Review of International Business and Trade Law (Forthcoming)
31 Pages Posted: 19 Jan 2016
Date Written: April 18, 2015
The International Organisation of Securities Commissions (IOSCO) is an international network of securities regulators. Although it has no formal status in international law, over the last three decades it has emerged to become the world’s central organisation responsible for the coordination of nations’ securities laws and the enforcement of those laws. One of the main causes of IOSCO’s rise in prominence is the fact that links between securities markets and shocks to the world’s financial systems, such as the Global Financial Crisis, have led governments to recognize that effective domestic regulation and stability cannot be achieved solely by action and policy formation at an exclusively national level. This has resulted in bodies such as the G20 relying on IOSCO to develop the policies needed to strengthen and stabilise securities markets.
Another key part of IOSCO success can be attributed to its Multilateral Memorandum of Understanding Concerning Consultation and Cooperation and the Exchange of Information (the ‘MMoU’). Formulated in 2002, this MMoU standardizes and simplifies the process by which securities commissions who are members of IOSCO can obtain information from other members for the purpose of enforcing their securities laws.
Spurred on by its success IOSCO has recently restructured and raised membership fees. It intends to continue to take steps towards its goals of achieving worldwide standardization of securities laws and improving enforcement of those laws. Given IOSCO’s growing importance to the world’s capital markets, this article examines its current role and how this may change in the future. This article also considers restraints upon its power and whether there are any ways in which it could work around these limitations.
Keywords: Securities Regulation, IOSCO, Transnational Regulatory Networks, Soft Law
JEL Classification: K22, K33
Suggested Citation: Suggested Citation