With many securities regulators around the world developing new rules for the crypto industry, the International Organization of Securities Commissions (IOSCO) aims to contribute to the ongoing discussion by releasing its own batch of crypto-focused policy recommendations.
IOSCO, an international body that brings together the world’s securities regulators, has formulated reports With 18 recommendations, and following a consultation period, it aims to complete its work on proposed measures in the fourth quarter of this year.
New recommendations for securities regulators
“The proposed recommendations are principle-based and outcome-oriented and are aimed at activities undertaken by crypto-asset service providers (CASPs). “The key issues and risks identified in crypto-asset markets are addressed by the organization,” the organization said in its report. To overcome these, they apply IOSCO’s widely accepted global standards for securities market regulation.”
“The proposed recommendations are based on activities and follow a ‘lifecycle’ approach to address the key risks identified in this report. They cover the range of activities in crypto-asset markets including those offered by CASP, trading in including admission, ongoing trading, settlement, market surveillance and custody as well as marketing and distribution to retail investors (covering advised and non-advised sales),” according to the international body.
DeFi Recommendations Report to be released this summer
Significantly, IOSCO has said that its recommendations do not cover activities, products or services provided in the field of decentralized finance.DeFi, That said, a relevant consultation report with proposed recommendations for DeFi will be published later this summer, as indicated by the organization.
In the latest report, IOSCO said its recommendations cover a total of six areas:
- conflicts of interest arising from vertical integration of activities and functions;
- market manipulation, insider trading and fraudulent activities;
- cross-border risk and regulatory cooperation;
- Custody and customer asset protective measures;
- operational and technical risks;
- Retail access, suitability and distribution.
“Given the global nature and certain unique characteristics of the crypto-asset market, the use of strong regulatory standards, along with international regulatory cooperation, will be critical to help ensure that any useful innovation can occur without the risk of regulatory arbitrage.” and may undermine standards of investor protection and market integrity,” the report said.
Established in 1983, IOSCO is based in Madrid, the capital of Spain. The body’s membership regulates more than 95% of the world’s securities markets in more than 130 jurisdictions. According to data released by IOSCO, securities regulators in emerging markets account for 75% of the organization’s general membership.