IOSCO Administrative Agreement: What it is and Why it Matters
The International Organization of Securities Commissions (IOSCO) is a global regulatory body that aims to promote and maintain fair, efficient, and transparent securities markets. One of the tools it uses to achieve this objective is an administrative agreement, a legal instrument that allows IOSCO members to cooperate and exchange information in the supervision and enforcement of securities regulations.
An IOSCO administrative agreement is a binding contract between two or more securities regulators that sets out the terms and conditions for sharing information, conducting joint investigations, and coordinating enforcement actions. The agreement typically includes provisions on confidentiality, data protection, mutual assistance, and dispute resolution. It also defines the scope and purpose of the cooperation, the roles and responsibilities of the parties, and the procedures for communication and consultation.
The main advantage of an IOSCO administrative agreement is that it enhances the effectiveness and efficiency of cross-border securities regulation. By pooling their resources and expertise, IOSCO members can better detect and deter misconduct, reduce regulatory arbitrage, and promote investor confidence in the integrity of global markets. Moreover, the agreement facilitates the exchange of best practices and the development of harmonized standards, which can lead to greater convergence and coherence in the regulatory landscape.
IOSCO administrative agreements can cover a wide range of topics, such as market surveillance, insider trading, market abuse, disclosure, and investor protection. Some agreements also address specific issues, such as the supervision of credit rating agencies, the oversight of alternative investment funds, or the regulation of crowdfunding platforms. The content and scope of the agreement depend on the needs and priorities of the parties involved, as well as the legal and cultural context in which they operate.
IOSCO administrative agreements are not mandatory, but many IOSCO members choose to participate in them voluntarily. As of June 2021, IOSCO has signed 116 administrative agreements with 72 jurisdictions, covering more than 90% of the world`s securities markets. The agreements are open to both IOSCO members and non-members, subject to certain conditions and procedures.
In conclusion, an IOSCO administrative agreement is a valuable instrument for promoting international cooperation and coordination in securities regulation. It allows regulators to share information, resources, and best practices, and to address common challenges and risks. As the world becomes more interconnected and complex, the need for effective and efficient cross-border regulation will only increase. An IOSCO administrative agreement can help meet that need and enhance the integrity and stability of global markets.