The International Organization of Securities Commissions has published a final thematic review assessing how market authorities have implemented the eight recommendations in its 2013 report on technological challenges to effective market surveillance. Drawing on 35 self-assessments from 34 member jurisdictions and covering measures in place as of December 2023, the review finds that most jurisdictions have implemented Recommendations 1–7, but flags recurring issues of concern that undermine consistent outcomes, particularly in more complex, multi-venue markets. Key gaps include weaknesses in automated surveillance governance and coverage, cross-venue data consolidation, and preparedness for algorithmic and high-frequency trading. While most jurisdictions operate automated surveillance and 24 report real-time (or fractional delay) capability, some do not conduct regular testing and recalibration of surveillance systems, and 13 jurisdictions with multiple trading venues lack automated cross-venue surveillance; several also cannot analyse order and trade information on an integrated basis across venues. The review highlights supervision gaps where certain marketplaces or products are not monitored, resource constraints for market surveillance, and the absence in 19 jurisdictions of formal or legal requirements to identify algorithmic execution. Data-related concerns include limited practical ability to access all relevant order and cancellation data in some jurisdictions, uneven adoption of a Central Reporting Point or equivalent cross-market data aggregation measures, difficulties linking customers or beneficial owners to orders and transactions in a small number of jurisdictions, and persistent problems reconstructing order books due to data format or quality despite formal requirements. Cross-border surveillance is identified as the weakest area overall, with most participating jurisdictions not having mapped their cross-border surveillance capabilities. IOSCO recommends that jurisdictions use the identified issues of concern to review and strengthen their market surveillance capability in light of their market structure and evolving technologies, and it notes its separate two-year artificial intelligence workstream launched in April 2024 through the IOSCO Fintech Task Force.
IOSCO 2025-04-01
International Organization of Securities Commissions issues thematic review identifying gaps in technology-enabled market surveillance across 34 jurisdictions
IOSCO published a thematic review on the implementation of its 2013 market surveillance recommendations, highlighting gaps in automated surveillance governance, cross-venue data consolidation, and algorithmic trading preparedness. Based on 35 self-assessments, it notes that while most jurisdictions have implemented Recommendations 1–7, issues persist in cross-border surveillance and data access. IOSCO advises jurisdictions to address these concerns and mentions its ongoing artificial intelligence workstream initiated in April 2024.