The International Organization of Securities Commissions (IOSCO), a global regulatory body overseeing securities markets, has released a comprehensive report proposing key policy measures for crypto and digital asset (CDA) markets.
Unified Global Regulatory Approach
The report delves into critical aspects of creating a unified global regulatory approach. Further, it emphasizes the need to address substantial risks to investor protection and market integrity. The focus is on centralized crypto asset intermediaries, referred to as crypto asset service providers (CASPs).
IOSCO’s report provides specific and focused recommendations aimed at establishing a distinct and robust global regulatory foundation. The emphasis is on ensuring that CASPs adhere to business conduct standards applicable in traditional financial markets. The report suggests that these expectations can be met by applying existing rules or introducing new ones, depending on the jurisdiction.
The report further identifies several critical domains that need attention to safeguard investor interests and market stability. These include conflicts of interest from vertical integration, market manipulation, insider trading, fraud, custody, client asset protection, cross-border risks, regulatory cooperation, operational and technological risks, and retail distribution.
Global Collaboration and Regulatory Cooperation
IOSCO’s board comprised of 35 regulators and top executives. These includes heads of the United States Commodity Futures Trading Commission, the U.S. Securities and Exchange Commission, and the United Kingdom’s Financial Conduct Authority, emphasizes the importance of global collaboration.
The recommendations align with IOSCO’s goals and principles for securities regulation and relevant supporting standards, recommendations, and best practices.
Supervisory Capacities for National Regulators
Building on their 2022 reports on DeFi, stablecoins, and influencers, IOSCO recommends that national regulators acquire supervisory capacities. These include establishing regulatory channels to address consumer complaints related to misleading and illegal promotions and implementing evidence-tracking processes to keep pace with the fast-changing nature of online information.