Advancing the SEC's Mission through International Organizations
May 12, 2017
- International Organization of Securities Commissions (IOSCO)
- Financial Stability Board (FSB)
- Council of Securities Regulators of the Americas (COSRA)
- IFRS Foundation Monitoring Board
- Monitoring Group
- Financial Action Task Force (FATF)
- Organization for Economic Cooperation and Development (OECD)
- cooperate in developing, implementing and promoting adherence to internationally recognized and consistent standards of regulation, oversight and enforcement in order to protect investors, maintain fair, efficient and transparent markets, and seek to address systemic risks;
- enhance investor protection and promote investor confidence in the integrity of securities markets, through strengthened information exchange and cooperation in enforcement against misconduct and in supervision of markets and market intermediaries; and
- exchange information at both global and regional levels on their respective experiences in order to assist the development of markets, strengthen market infrastructure and implement appropriate regulation.
- Issuer Accounting, Audit and Disclosure - Policy Committee 1: Policy Committee 1 (PC1) focuses on the nature and quality of the information provided to investors by listed companies and other entities which issue listed securities. PC1 carries out its work by developing or participating in the development of the international disclosure, accounting and auditing standards that form the foundation of the information provided to investors, as well as considering matters related to the application of these standards in practice.
- Regulation of Secondary Markets - Policy Committee 2: Policy Committee 2 (PC2) monitors development in the structure of global capital markets with a particular focus on changes that impact the effectiveness and integrity of markets.
- Regulation of Market Intermediaries - Policy Committee 3: Policy Committee 3 (PC3) addresses issues relating to market intermediaries. Intermediaries play a critical role in financial markets: the manner in which they meet standards of capital adequacy, internal organization, and operational conduct to ensure that clients' interests and assets are protected are key parts of IOSCO's Objectives and Principles and are of vital importance to the efficient functioning of markets.
- Enforcement and Information Sharing - Policy Committee 4: Policy Committee 4 (PC4) focuses on the prevention and detection of breaches of securities laws and regulations in an increasingly internationalized market. Enhancing the ability to detect such breaches and take enforcement action remains a priority for the IOSCO Board. In this regard, the work of the IOSCO Board will continue to reflect the importance and desirability of mutual assistance, including the exchange of information between regulators.
- Investment Management - Policy Committee 5: Policy Committee 5 (PC5) addresses issues relating to investment management. Its remit encompasses both collective investments schemes and private funds, including hedge, private equity, and venture capital funds, as well as advisers to such funds. Its work over the last few years has answered the challenges posed by the recent financial crisis, including by developing a global template to gather data from hedge funds.
- Credit Rating Agencies - Policy Committee 6: Policy Committee 6 (PC6) evaluates regulatory and policy initiatives affecting credit rating agency activities and seeks cross-border regulatory consensus for their activities as reflected by the IOSCO Code of Conduct Fundamentals for CRAs and IOSCO Statement of Principles Regarding the Activities of Credit Rating Agencies. PC6 also assesses IOSCO jurisdictions' (such as the United States) supervisory initiatives in order to evaluate whether, and how, regulatory programs in each jurisdiction implement the four principles set forth in the IOSCO CRA Principles.
- Commodity Futures Markets - Policy Committee 7: Policy Committee 7 (PC7) focuses on issues relating to commodities.
- Committee on Retail Investors - Policy Committee 8: Policy Commit 8 (PC8) leads IOSCO's work on retail investor education and protection. By focusing on investor education, IOSCO members can shares experiences and build expertise globally in financial literacy. PC8 aims to ensure the IOSCO Board takes retail investor perspectives into account while formulating policy.
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 eight policy committees, as described below. SEC staff actively participates as a member in Policy Committees 1-6 and 8:
Recent assessments, Consultation Documents and other reports from each of the committees are available on IOSCO's web site.
The SEC also actively participates in the Committee on Emerging Risks, which works alongside the other Committees and IOSCO research staff. The Committee on Emerging Risk focuses on the role securities regulators play in addressing and mitigating systemic risk, considering the ways in which systemic risk intersects with their mandates.
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, cross-border regulation, 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 may contain 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.
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: