The International Organization of Securities Commissions published a final IOSCO Standards Implementation Monitoring review assessing implementation of Principles 6 and 7 of the IOSCO Objectives and Principles of Securities Regulation, covering regulators’ roles in systemic risk identification and management and in regularly reviewing the regulatory perimeter. Based on self-assessments from 55 regulators in 50 jurisdictions, IOSCO found that implementation is generally high, while noting that gaps are more prevalent in nascent and emerging market jurisdictions. For Principle 6, most participating jurisdictions reported having, or contributing to, formalised arrangements to identify, monitor, mitigate and manage systemic risk, supported by domestic coordination and cross-border information sharing, typically via memoranda of understanding. IOSCO nonetheless identified shortcomings including unclear responsibilities and/or lack of a systemic risk definition (notably Bahamas, Brazil, Jordan, Maldives, Paraguay, Srpska and Zambia for responsibilities, with additional jurisdictions highlighted for lacking a definition), limited evidence of a formalised systemic risk process (including Chile, Dominican Republic, Eastern Caribbean Currency Union, Jordan, Maldives, Peru and Srpska), domestic or cross-border information-sharing weaknesses (including Brazil, Dominican Republic, El Salvador, Pakistan and Zambia), and resourcing gaps where systemic-risk-specific skills and technical capacity were not evidenced (including Bahamas, Botswana, Brazil, Chile, Dominican Republic, Eastern Caribbean Currency Union, Egypt, Jordan, New Zealand, Paraguay, Peru, Srpska and Zambia). For Principle 7, IOSCO observed broad use of perimeter-review processes but uneven formalisation, and flagged the absence of a formal process to revisit past policy decisions when circumstances change (Botswana, Chile, Eastern Caribbean Currency Union and Jordan) and the lack of a formalised process to review unregulated products, markets or activities, including regulatory arbitrage risks (Dominican Republic and Botswana). The report sets out jurisdiction-specific recommendations to address the identified gaps and notes that jurisdictions may seek IOSCO support letters to endorse legislative reform needs and/or capacity building and technical assistance to implement reforms.
IOSCO 2025-04-01
International Organization of Securities Commissions implementation monitoring review finds generally high adoption of systemic risk and perimeter review principles but flags gaps in several jurisdictions
The International Organization of Securities Commissions (IOSCO) reviewed the implementation of Principles 6 and 7 of its Objectives and Principles of Securities Regulation, noting high compliance but gaps in emerging markets. Based on self-assessments from 55 regulators, issues included unclear systemic risk responsibilities, lack of formal processes, and information-sharing weaknesses. IOSCO provided jurisdiction-specific recommendations and support for legislative reforms and capacity building.