IOSCO Annual Meeting addresses the impact of COVID 19 and other critical matters on securities markets

November 23, 2020

Published: IOSCO

Members of the International Organization of Securities Commissions (IOSCO) gathered online for the organization´s 45th Annual Meeting last week to discuss the impact of COVID 19 on capital markets and other priority issues facing securities market regulators and supervisors today. Some 480 members from 159 jurisdictions participated in the event.

The meeting took place from 9 to 18 November and included virtual meetings of the IOSCO Board, IOSCO´s Growth and Emerging Markets (GEM) Committee, its four Regional Committees and the Affiliate Members Consultative Committee (AMCC), culminating with the meeting of its Presidents Committee. The committees discussed the progress made on IOSCO priority work on sustainable finance, financial stability risks, market fragmentation, asset management and retail market conduct. They also explored meaningful waysto contribute to these priorities while addressing members’ needs regarding such areas as Fintech, cyber resilience, technical assistance and capacity building.

The event concluded with the virtual general meeting of all IOSCO members in the Presidents Committee, allowing the wider membership to engage with the IOSCO leadership on issues such as sustainable finance, non-bank financial intermediation (NBFI), market fragmentation and the COVID pandemic that are shaping global capital markets today,

At its meeting, the IOSCO Board approved the following two additional priority themes for 2021:

• Financial stability and systemic risks in NBFI; and

• Remote working, misconduct risks, fraud and scams, and operational resilience, in the context of the COVID-19 pandemic.

Sustainable Finance

The IOSCO Board opened its meeting with a dialogue on the relevance of sustainability-related disclosures with Mark Carney, UN Special Envoy on Climate Action and Finance and advisor to the COP26 Event on Climate Change.

The Board discussed the purpose of a consistent and comprehensive framework that builds on the current global initiatives on corporate disclosures by the alliance of international sustainable finance standard setters, together with IFRS Foundation proposals for a standard setting mechanism. IOSCO currently chairs the Monitoring Board that oversees the work of the IFRS Foundation from a public interest perspective.

The Board agreed that the IOSCO Sustainable Finance Task Force should further explore the following areas:

• pathways to mandatory disclosure beyond comply or explain requirements;

• engaging with the IFRS Foundation to ensure that any proposals stemming from the consultation paper meet securities regulators’ expectations both in terms of content and governance; and

• advancing discussions regarding the establishment of an assurance framework for sustainability disclosures.

The Board also discussed the Sustainable Finance Task Force´s other work on sustainability-related disclosures, green-washing and the increasing activity of ESG data providers and credit rating agencies regarding ESG ratings.

Financial Stability Engagement Group (FSEG)

The Board discussed the next steps in the FSEG´s work on the impact of the March turmoil on marketbased financial intermediation (NBFI), specifically on money market funds (MMFs), open-ended investment funds, bond liquidity and margins.

Members expressed their full commitment to further collaboration within IOSCO and with the Financial Stability Board on addressing the issues arising from the March turmoil in capital markets.

Retail Market Conduct Task Force (RMCTF)

The Board approved a RMCTF report aimed at assisting IOSCO members in addressing emerging conduct issues in retail markets arising from the pandemic and other similar crises. The report identifies the common drivers of this misconduct and actions taken by firms and regulators to mitigate risks and retail investor harm. The Board discussed further work for the task force aimed at strengthening investor confidence and trust in the markets.

New mandates

The Board agreed to undertake further work on:

• good practices or recommendations for audit committees on goodwill impairment;

• potential valuation-related issues in financial reporting, auditing and disclosures;

• the impact of COVID-19 on secondary trading market microstructure mechanisms, the operations of trading venues and business continuity planning

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