IOSCO Issues Policy Measures on OTC Leveraged Products
IOSCO issued a final report providing measures for securities regulators to consider when addressing the risks arising from the marketing and sale of OTC leveraged products to retail investors. The report contains three complementary toolkits that cover the marketing and sale of rolling-spot forex contracts, contracts for differences (CFDs) and binary options. IOSCO also issued a public statement on the risks of binary options and the response of regulators for mitigating the risks and harm to retail investors transacting in these products.
The report on retail OTC leveraged products contains measures aimed at increasing the protection of retail investors who are offered OTC leveraged products, often on a cross-border basis. The toolkits set out guidance for regulators on:
- Policy measures that can help to address the risks arising from the marketing and sale of OTC leveraged products by intermediaries
- Educating investors about the risks of OTC leveraged products and the firms offering them
- Enforcement approaches and practices to mitigate the risks posed by unlicensed firms offering the products
The measures in the three toolkits draw largely on IOSCO members’ experiences and practices. The toolkits described in this report do not mandate regulatory action. The initiatives are intended to serve as useful guidance to IOSCO members as they consider their approaches to address the risks arising from the marketing and sale of OTC leveraged products to retail investors. IOSCO members are encouraged to consider adopting one or several of these measures, in accordance with their legal and regulatory framework and the specific risks they have identified, to help ensure an appropriately high level of protection for retail investors transacting in the relevant products. Therefore, implementation of the different measures may vary across IOSCO members.
Related Links
Keywords: International, Securities, OTC Leveraged Products, Customer Protection, IOSCO
Previous Article
OCC Proposes to Amend Guidelines on Recovery Planning StandardsRelated Articles
UK Government to Set Out Rules on Wind-down of Critical Benchmarks
HM Treasury notified that, after considering all responses, the government intends to bring forward further legislation, when the Parliamentary time allows, to address issues identified in the consultation on supporting the wind-down of critical benchmarks.
EIOPA Launches Stress Test for Insurance Sector in EU
EIOPA launched the 2021 stress test for the insurance sector in EU.
UK Authorities Publish Third Edition of Regulatory Initiatives Grid
UK authorities jointly published the third edition of Regulatory Initiatives Grid setting out the planned regulatory initiatives for the next 24 months.
EC Consults on Regulation on Non-Financial Sustainability Disclosures
EC is requesting feedback on the proposed Commission Delegated Regulation on the content, methodology, and presentation of information that large financial and non-financial undertakings should disclose about their environmentally sustainable economic activities under the Taxonomy Regulation.
OSFI Outlines Prudential Policy Priorities for Coming Months
OSFI has set out the near-term priorities for federally regulated financial institutions and federally regulated private pension plans for the coming months until March 31, 2022.
BIS Announces TechSprint on Innovative Green Finance Solutions
Under the Italian G20 Presidency, BIS Innovation Hub and the Italian central bank BDI launched the second edition of the G20 TechSprint on the lookout for innovative solutions to resolve operational problems in green and sustainable finance.
ACPR Publishes Version 1.0.0 of RUBA Taxonomy
ACPR published Version 1.0.0 of the RUBA taxonomy, which will come into force from the decree of January 31, 2022.
EBA Proposed Regulatory Standards for Central Database on AML/CFT
EBA proposed the regulatory technical standards on a central database on anti-money laundering and countering the financing of terrorism (AML/CFT) in EU.
ECB Responds to EC Consultation on Crisis Management Framework
ECB published its response to the targeted EC consultation on the review of the bank crisis management and deposit insurance framework in EU.
BCBS, CPMI, and IOSCO to Survey Market Participants on Margin Calls
BCBS, CPMI, and IOSCO (the Committees) are inviting entities that participate in market infrastructures and securities markets through an intermediary as well as non-bank intermediaries to complete voluntary surveys on the use of margin calls.
