IOSCO Task Force Report on Regulation of Wholesale Market Conduct
IOSCO published its Task Force report on the regulation of wholesale market conduct. The report describes the tools and approaches that IOSCO members use to discourage, identify, prevent, and sanction misconduct by individuals in wholesale markets. The report also identifies the tools used by market regulators to minimize misconduct risk arising from the particular characteristics of wholesale markets.
The report describes the regulatory requirements for market participants in wholesale markets. These requirements are based on broad expectations of the market conduct, such as honesty, integrity, and competence. These expectations are consistent with the existing IOSCO principles, standards, and other initiatives on conduct regulation, including its Principles for Financial Benchmarks, which were published in July 2013. The report also provides an overview of the ways in which market regulators help ensure that firms and individuals meet their obligations under the legal, regulatory, and supervisory frameworks in their jurisdictions.
The efficient functioning of wholesale financial markets is critical to both global and national economies. Ashley Alder, Chair of the IOSCO Board and Chair of the Task Force on Market Conduct, said “Misconduct erodes investor trust and confidence in financial services and undermines the effective operation of financial markets, including wholesale markets.” Relevant tools to address this risk include tailored enforcement and remedial sanctions, such as orders to participate in market structural reforms or agreed remediation and other undertakings; surveillance and data analysis to identify suspicious trades; and the protection of whistleblowers.
Related Links
Report on Wholseale Market Conduct (PDF)
Principles for Financial Benchmarks (PDF)
Keywords: International, IOSCO, Securities, Market Conduct, Wholesale Market
Featured Experts
Brian Robinson
Actuary; risk management specialist; corporate and capital modelling expert
Previous Article
Pentti Hakkarainen of ECB on Challenges and Future of Banking in EURelated Articles
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.
BIS Bulletin Examines Cognitive Limits of Large Language Models
The use cases of generative AI in the banking sector are evolving fast, with many institutions adopting the technology to enhance customer service and operational efficiency.
ECB is Conducting First Cyber Risk Stress Test for Banks
As part of the increasing regulatory focus on operational resilience, cyber risk stress testing is also becoming a crucial aspect of ensuring bank resilience in the face of cyber threats.
EBA Continues Momentum Toward Strengthening Prudential Rules for Banks
A few years down the road from the last global financial crisis, regulators are still issuing rules and monitoring banks to ensure that they comply with the regulations.
EU and UK Agencies Issue Updates on Final Basel III Rules
The European Commission (EC) recently issued an update informing that the European Council and the Parliament have endorsed the Banking Package implementing the final elements of Basel III standards