IOSCO published a consultation report that proposes 11 recommendations for emerging market member jurisdictions to consider when issuing regulations or guidance regarding sustainable financial instruments. The Growth and Emerging Markets Committee (GEMC) of IOSCO believes that its recommendations will benefit both issuers and investors by improving the consistency of regulation of sustainable finance in emerging markets. Comment period on the consultation ends on April 01, 2019.
Among other things, the recommendations propose requirements for disclosure of material Environmental, Social, and Governance (ESG) specific risks, aimed at enhancing transparency. The consultation report explores the trends and challenges that influence the development of sustainable finance in emerging capital markets. It also provides an overview of the initiatives that regulators, stock exchanges, policy makers, and other key stakeholders in emerging markets have undertaken in this area. The report identifies the prerequisites for creating an ecosystem that facilitates sustainable finance, such as an appropriate regulatory framework and fit-for-purpose market infrastructure, reporting and disclosure requirements, governance and investor protection guideline,s and mechanisms to address needs and requirements of institutional investors.
The proposed recommendations fall into the following categories:
- Integration by issuers and regulated entities of ESG-specific issues in their overall risk appetite and governance (Recommendation 1)
- ESG-specific disclosures and reporting (Recommendation 2)
- Data quality (Recommendation 3)
- Definition of sustainable instruments (Recommendation 4)
- Eligible projects and activities (Recommendations 5 to 9)
- Integration of ESG-specific issues into the investment analysis, strategies, and overall governance of institutional investors (Recommendation 10)
- Building capacity and expertise for ESG issues (Recommendation 11)
Comment Due Date: April 01, 2019
Keywords: International, Banking, Securities, Sustainable Finance, ESG, Regulatory Framework, IOSCO
Previous ArticleBOT and SBV Sign MoUs to Promote Regulatory and Fintech Cooperation
The Central Bank of the Philippines (BSP) issued communications covering developments related to online lending platforms, open finance framework and roadmap, and on the expected regulations in the area sustainable finance.
The Board of Governors of the Federal Reserve System (FED) published the final rule that amends Regulation I to reduce the quarterly reporting burden for member banks by automating the application process for adjusting their subscriptions to the Federal Reserve Bank capital stock, except in the context of mergers.
The European Banking Authority (EBA) published its assessment of risks through the quarterly Risk Dashboard and the results of the Autumn edition of the Risk Assessment Questionnaire (RAQ).
The Malta Financial Services Authority (MFSA) updated the guidelines on supervisory reporting requirements under the reporting framework 3.0.
The Hong Kong Monetary Authority (HKMA) published a circular, along with the reporting form and instructions, for self-assessment, by authorized institutions, of compliance with the Code of Banking Practice 2021.
The Financial Conduct Authority (FCA) decided to register European DataWarehouse Ltd and SecRep Limited as securitization repositories under the UK Securitization Regulation, with effect from January 17, 2022.
The European Commission (EC) published the Delegated Regulation 2022/25, which supplements the Investment Firms Regulation (IFR or Regulation 2019/2033) with respect to the regulatory technical standards specifying the methods for measuring the K-factors referred to in Article 15 of the IFR.
The Bank of International Settlements (BIS) published a paper that assesses the ways in which platform-based business models can affect financial inclusion, competition, financial stability and consumer protection.
The Central Bank of Egypt (CBE) published a circular with instructions on emergency liquidity assistance to banks that are unable to meet their liquidity requirements.
The European Supervisory Authorities (ESAs) published the list of identified financial conglomerates for 2021.