Washington, D.C., Nov. 24, 2008 (LAWFUEL) – The International Organization of Securities Commissions (IOSCO) Technical Committee launched three task forces to support G-20 aims following a meeting by teleconference today. The meeting was convened by SEC Chairman Christopher Cox to craft a detailed work program to address the continuing market turmoil, focused on strengthening financial markets and investor protections. Chairman Cox, who is Chairman of IOSCO’s Technical Committee, said:
“IOSCO’s Technical Committee is taking urgent action to coordinate global regulatory measures aimed at abusive short selling, including reporting requirements for short positions and trading activity.
“Being representative of over one hundred securities regulators worldwide, IOSCO is central to developing coordinated regulatory solutions to deal with the current financial crisis. To be effective, the regulation of trading abuses must be coordinated across major markets. This is equally true not only of short selling, but also of derivatives trading and activity by currently unregulated entities such as hedge funds. The three task forces the Technical Committee is forming on each of these topics will help ensure that global capital markets address the current turmoil on a sound basis and in a well-coordinated way.”
The Technical Committee Task Forces will consider the following issues:
· Short Selling – the Task Force will work to eliminate gaps in various regulatory approaches to naked short selling, including delivery requirements and disclosure of short positions. In this connection, the Task Force will also examine how to minimize adverse impacts on legitimate securities lending, hedging and other types of transactions that are critical to capital formation and to reducing market volatility. The Task Force will be chaired by the Securities and Futures Commission of Hong Kong.
· Unregulated Financial Markets and Products – given the impact unregulated financial markets and products have had on global capital markets, the Task Force will examine ways to introduce greater transparency and oversight to unregulated market segments, such as OTC markets for derivatives and other structured financial products. The Task Force will be co-chaired by the Australian Securities and Investments Commission and the Autorité de Marché Financiers of France.
· Unregulated Financial Entities – the Task Force will examine issues surrounding unregulated entities such as hedge funds, including the development of recommended regulatory approaches to mitigate risks associated with their trading and traditional opacity. The Task Force will be chaired by the CONSOB of Italy and the Financial Services Authority of the United Kingdom.
The Task Forces will present their reports at the next Technical Committee meeting in February 2009 and to the next G-20 summit in spring 2009.