THE IOSCO PRINCIPLES OF SECURITIES REGULATION

 

  1. REGULATOR

    1. Responsibilities should be clear and objectively stated

    2. Operational independent and accountable in exercise of functions

    3. Must have adequate powers, proper resources and the capacity to perform its functions

    4. Must adopt clear and consistent regulatory processes

    5. Staff must observe professional standards / confidentiality

  2. SELF-REGULATION

    1. Make appropriate use of SRO’s that exercise some direct oversight to the extent appropriate to the size and complexity of the markets

    2. Be subject to the oversight of the regulator and should observe standards of fairness and confidentiality

  1. PRINCIPLES FOR ENFORCEMENT OF SECURITIES REGULATION

    1. Regulator should have inspection, investigation and surveillance powers

    2. Regulator must have comprehensive enforcement powers

    3. Regulatory system must ensure an effective use of inspection, investigation, surveillance and enforcement powers and an effective compliance programme

  1. PRINCIPLES FOR CO-OPERATION IN REGULATION

    1. Regulator must have authority to share public and non-public information

    2. Should establish information sharing mechanisms

    3. Assistance should be provided to foreign regulators

  1. PRINCIPLES FOR ISSUERS

    1. Full, timely and accurate disclosure of financial results material to investors’ decisions

    2. Holders of securities must be treated in fair and equitable manner

    3. Accounting and auditing standards be of high and internationally quality

  1. PRINCIPLES FOR COLLECTIVE INVESTMENT SCHEMES

    1. Should be standards for eligibility and the regulation of those who market CIS’s

    2. System must provide for rules governing CIS’s

    3. Disclosure to enable the evaluation of the suitability of CIS’s

    4. Must be a proper and disclosed basis for asset valuation and pricing and redemption of units in a CIS

  1. PRINCIPLES FOR MARKET INTERMEDIARIES

    1. Minimum entry standards for market intermediaries

    2. Initial and capital and other prudential requirements that reflect the risks that the intermediaries undertake

    3. Must comply with standards of internal organisation and operational conduct, ensure proper management of risk

    4. Procedures for dealing with the failure of a intermediary to reduce loss to investors and to contain systemic risk

 

  1. PRINCIPLES FOR SECONDARY MARKET

    1. Establishment of trading systems (exchange) must be subject to regulatory authorisation and oversight

    2. Must be ongoing regulatory supervision of exchanges / trading systems to maintain integrity of trading through fair rules

    3. Regulation must promote transparency of trading

    4. Regulation must detect manipulation and unfair practices

    5. Must be proper management of large exposures, default risk and market disruption

  1. PRINCIPLES FOR CLEARING AND SETTLEMENT

    1. Systems for clearing and settlement subject to oversight and must be effective and fair