IOSCO requests feedback following its exchange report

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The International Organization for Securities Commissions (IOSCO) has asked for feedback on its consultation report from market participants. 

The IOSCO published a Consultation Report on Evolution in the Operation, Governance and Business Models of Exchanges: Regulatory Implications and Good Practices, in which it analysed the structural and organisational changes within stock exchanges, with a focus on business models and ownership structures.

A shift towards more competitive, cross-border, and diversified operations has been highlighted by the report, which noted that exchanges are integrating into larger corporate groups, whilst discussing regulatory considerations. 

Isadora Tarola, Chair of the IOSCO Committee on Regulation of Secondary Markets, said: “In today’s rapidly evolving financial landscape, this consultation report sheds light on the shifts occurring within exchanges worldwide and offers six good practices as well as supervisory toolkits which aim to address the challenges and ensure effective oversight in this evolving environment.”

One notable change subject the report discusses is the potential conflicts of interest arising from matrix structures and the challenges of overseeing individual exchanges within Exchange Groups. 

Furthermore, the report outlines a set of six ‘good practices’ for regulators to consider in the supervision of exchanges, especially when they provide multiple services and/or are part of an Exchange Group.

Additionally, IOSCO also provided a non-exclusive list of supervisory tools, labelled as “toolkits”, which are used by its own jurisdictions to help other exchanges avoid conflicts.

Recently, the firm has also been making moves in fraud prevention, as it issued a warning in December relating to the heightened risk of online investment fraud and scams for retail investors.

Following its publication, the IOSCI has asked for feedback on the report, setting a deadline of 3 July for any responses.