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Advancing the SEC's Mission through International Organizations
IOSCO is a multilateral organization of securities regulators in which the SEC actively participates. Together, its members regulate over 95% of the world's securities markets. IOSCO members have resolved to:
The SEC is an active member of the IOSCO Board. One of the primary functions of the IOSCO Board is to review major securities regulatory issues and to develop appropriate policy responses. The policy work of IOSCO is conducted by seven policy committees, covering seven major functional subject areas:
The SEC actively participates as a member in Policy Committees 1-6 and the Standing Committee on Risk and Research. The Risk and Research Committee focuses on the role securities regulators play in addressing and mitigating systemic risk. Its members consider the ways in which systemic risk intersects with their mandates and provide insight into how IOSCO and its members can identify, monitor, mitigate, and manage systemic risk.
From time to time, the IOSCO Board will establish ad hoc groups to address policy issues in areas not otherwise covered by the standing Policy Committees. As the policy issues being considered often directly affect the SEC, SEC staff actively participate in these IOSCO Task Forces. In the past, various task forces have focused on audit services, credit rating agencies, hedge funds, OTC derivatives regulation, securitization, and supervisory cooperation. The work of the task forces frequently results in a final report, published on IOSCO's website, that contains policy recommendations for IOSCO members. A current list of IOSCO task forces may be found on IOSCO's website.
The standards developed by the policy committees or task forces, and then publicly issued by IOSCO, become the benchmark against which an IOSCO member's regulatory practices are assessed. IOSCO Members, including the SEC, undergo various assessments by a number of international organizations, including the FSB, the IMF as part of it Financial Sector Assessment Program, and IOSCO itself, which has established its own Assessment Committee that conducts both country and thematic reviews.
Many of these assessments refer to IOSCO's Objectives and Principles of Securities Regulation ("Principles"), which is the benchmark standard for securities regulators and one of the twelve key standards for financial stability as recognized by the Financial Stability Board. In September 2011, IOSCO published a revised Methodology for Assessing Implementation of the IOSCO Objectives and Principles of Securities Regulation, which is designed to provide IOSCO's interpretation of the Principles and to guide self-assessment or third-party assessments.
The SEC is a member of the Financial Stability Board (FSB) and serves on the FSB Steering Committee. The G20 reconstituted the Financial Stability Forum into the FSB in April 2009 following the 2009 G20 London Summit. The FSB's mandate is to address vulnerabilities, promote strong regulatory, supervisory, and other policies in the interest of financial stability, and focus on topics of import to the G20.
Since 2009, the FSB has focused on carrying out the regulatory reform agenda set forth by the G20 Leaders. This regulatory reform agenda has included work pertaining to OTC derivatives, money market funds, securities lending and repurchase agreements, securitization, and other topics of primary interest to the SEC.
The most recent Financial Stability Board reports to G20 Leaders on progress in implementing financial regulatory reforms may be found on the FSB's web site.
The SEC also promotes its interests through the Council of Securities Regulators of the Americas (COSRA), an organization composed of securities regulators in the Western hemisphere. COSRA works in conjunction with IOSCO through IOSCO's Inter-American Regional Committee and assists IOSCO in helping members comply with the IOSCO Principles and Methodology by conducting various seminar training programs, including those that focus on IOSCO's Multilateral Memorandum of Understanding as well as other current regional issues.
Established in 1996, the Joint Forum deals with cross-sectoral issues in banking, securities and insurance supervision. The Joint Forum is a group of technical experts working under the umbrella of three international groupings of supervisory bodies: the Basel Committee on Banking Supervision, IOSCO, and the International Association of Insurance Supervisors. The work of the Joint Forum encompasses issues of common interest to the three parent committees. The Joint Forum has specific mandates to undertake work on the differentiated nature and scope of financial regulation, the use of special-purpose vehicles, and aggregation, diversification and modeling. Recent publications of the Joint Forum dealing with securities matters may be found on IOSCO's website.
The purpose of the IFRS Foundation Monitoring Board is to strengthen the institutional governance of the IFRS Foundation, the public interest overseer of the International Accounting Standards Board (IASB). The IASB, in turn, promulgates International Financial Reporting Standards (IFRS). Through its interaction with the IFRS Foundation, the IFRS Foundation Monitoring Board serves as a means through which the IFRS Foundation can be held accountable to those regulatory authorities charged with investor protection that allow or require the use of IFRS in their jurisdictions. One significant means of accountability is that the IFRS Foundation Monitoring Board is responsible for approving new appointments to the board of trustees of the IFRS Foundation.
The mission of the Monitoring Group is to ensure that the public interest is represented in the activities of the standard-setting boards operating under the International Federation of Accountants (IFAC), an accounting industry group. IFAC's standard-setting boards are responsible for issuing International Standards on Auditing, as well as international ethics and education standards for auditors. The Monitoring Group members include IOSCO, the Basel Committee on Banking Supervision, the European Commission, the Financial Stability Board, the International Association of Insurance Supervisors, the International Forum of Independent Audit Regulators, and the World Bank. The SEC participates in the Monitoring Group's initiatives via the SEC's membership in IOSCO. To enhance focus on the public interest in standard-setting, in 2003, the Monitoring Group established the Public Interest Oversight Board (PIOB) to directly oversee, from a public interest perspective, these activities. The Monitoring Group appoints members of the PIOB, monitors the PIOB's public interest oversight activities, and approves the PIOB's annual budget.
The Financial Action Task Force (FATF) is an inter-governmental organization in which SEC staff participates. It was created in 1989 by the G7 to reform legislation and regulation around the world to strengthen the global anti-money laundering infrastructure. The work of the FATF focuses on three principal areas: (i) setting standards for national anti-money laundering and counter terrorist financing programs; (ii) evaluating the degree to which countries have implemented measures that meet those standards; and (iii) identifying and studying money laundering and terrorist financing methods and trends.
The Organization for Economic Cooperation and Development (OECD) is best known for its publications and statistics, though its work covers a wide range of economic and social issues. It produces internationally agreed instruments, decisions and recommendations to promote rules of the game in areas where multilateral agreement is necessary for individual countries to make progress in a global economy. The OECD plays a particularly prominent role in fostering good governance in the public and corporate sectors. The SEC staff participates in certain of its projects and working groups relating to the securities markets, including the OECD Working Group on Bribery and the OECD Corporate Governance Committee.
Other topics in International Regulatory Policy: