The international organization of securities regulator (IOSCO) was established in 1983. The purpose of its establishment was to encompass the world’s securities regulator together. It sets the global standards for the securities sector.

IOSCO is the only organization that regulates the financial sector internationally and also includes within its ambit the membership of all the major emerging markets globally. IOSCO’s membership regulates more than 95% of the world’s securities markets. It includes a majorly 120 securities regulators and 80 other securities market participants like stock exchanges, regional, financial, and international organizations, etc.

FUNCTIONS:

• Providing technical assistance comprehensively to its members.
• Regulating the emerging markets.
• Promoting adherence to internationally recognized standards.
• Developing and implementing international standards for securities regulation.

MEMBERSHIP:

Presently, IOSCO has 227 members divided into 129 ordinary members, 31 associate members, and 67 affiliate members. IOSCO is working with G20 and the Financial Stability Board on the global level as a regulatory reform agenda.

OBJECTIVES:

• Protecting the investor: Protecting and promoting the investor confidence in the securities market integrity, market, and market-intermediaries supervision. The objective is achieved through strengthening information exchange and cooperation in enforcement against misconduct.
• Ensuring fair, transparent, and efficient market: Developing, implementing, and promoting adherence and enforcement and seeking to address systemic risks to protect investors and to maintain a fair, efficient, and transparent market.
• Reducing systemic risk: Exchanging information at both regional and global levels to assist the development of markets, strengthen the market infrastructure, and implement appropriate regulation to reduce universal risk.

IOSCO’s MEMBERSHIP:

There are 3 types of membership based on the different approaches to the securities markets issues.

• Ordinary Member: They are those members which are primarily working as a securities regulator in every jurisdiction. Each ordinary member has one vote. For example, SEBI is the regulator of the Indian Securities Market. Thus, all government bodies responsible for the regulation of the securities market of every country can be admitted as an ordinary member. A self-regulatory body can be admitted as an ordinary member but if from the same jurisdiction a governmental regulatory body is admitted to IOSCO as an ordinary member of that jurisdiction then self-regulatory body membership lapses.
• Associate Member: They are those members which are future regulators in that jurisdiction if the jurisdiction has more than one regulator. An associate member has no voting power. They cannot become members of the Executive Committee but they can become members of the President’s committee. Moreover, a self-regulatory body cannot become an associate member of IOSCO. For example, The Commodity Future Trading Commission, The International Commission of Securities are associate members of IOSCO with the U.S. Securities and Exchange Commission being an ordinary member of the United States.
• Affiliate Member: They are members other than the regulators. Affiliate members have no voting power. They cannot become members of the Executive Committee nor the President’s Committee but they can become a member of the Self-Regulatory Organizations Consultative Committee. A self-regulatory body or an international body with an appropriate interest in security regulation can acquire membership under this category. For example, Stock exchanges, various stock market industry associations, etc.

PRINCIPLES:

In 1998, IOSCO adopted IOSCO Principles which with the pace of time have developed and expanded. These principles include:

• To improve auditor independence and auditor oversight – regulatory principles
• For corporate financial disclosure and transparency - regulatory principles
• Regarding conflicts of interest for financial analysts - regulatory principles
• For credit rating agencies - a code of conduct
• For good securities regulation for IOSCO members - a set of core principles
• IOSCO members to provide each other in an investigation with information and statements of witness - a multilateral memorandum of understanding.

This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being. Further, despite all efforts that have been made to ensure the accuracy and correctness of the information published, White Code Legal and Tax shall not be responsible for any errors caused due to human error or otherwise.