NO 232 – JUNE 2012
Sustainable stock exchanges

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WFE Focus June 2012
Regulation

IOSCO appoints new Chairman during its annual conference

The International Organization of Securities Commissions was held in Beijing in May 2012. The conference focused on the themes of a new financial architecture for the post-crisis era, financial market infrastructures and market integrity, capital markets development in emerging markets, and regulation of commodity futures and financial derivatives. During the annual conference, the Board appointed Mr. Masamichi Kono as Chairman of the new IOSCO Board. Mr. Kono is the Vice Commissioner for International Affairs at the Financial Services Agency of Japan, and has served as Chairman of the IOSCO Technical Committee since 2011. To enhance the effectiveness of the Organization’s, a new governance structure and strategic direction were decided. A transitional IOSCO Board was constituted to incorporate the functions of the Technical Committee, the Executive Committee and the Emerging Markets Committee Advisory Board. The merger streamlines IOSCO’s governance structure and decision-making process, helping position the Organization for a larger role in shaping the global framework for securities market regulation. The new structure is expected to improve the effectiveness of the IOSCO policy and standard-setting committees, making them more effective and inclusive of members. IOSCO’s next annual conference will take place in Luxembourg on 15/19 September 2013.

IOSCO publishes its final report on International Standards for Derivatives Market Intermediary Regulation

The International Organization of Securities Commissions has published a report entitled “International Standards for Derivatives Market Intermediary Regulation”, which recommends high-level international standards for the regulation of market participants that are in the business of dealing, making a market or intermediating transactions in OTC derivatives. Historically these derivatives market intermediaries often have not been subject to the same level of regulation as participants in the traditional securities market. Without sufficient regulation, some derivatives market intermediaries operated in a manner that created risks to the global economy that manifested during the financial crisis of 2008. The report follows on the commitment by G-20 leaders in 2009 to reform the OTC derivatives market in response to the crisis. It takes into account distinctions between the OTC derivatives market and the traditional securities markets, and the differences in jurisdictional approaches of international market authorities.

Canadian securities regulators to strengthen OTC rules

The Canadian Securities Administrators are adopting a new rule to combat the abuse of OTC markets in the US by companies based in Canada. They published advance notice of the rule, which aims to address the damage that is caused to the reputation of Canada’s capital markets when Canadian firms engage in abusive activities in the US OTC markets, such as creating shell companies to carry out stock promotion schemes. The rule requires full disclosure by issuers with a significant connection to a Canadian jurisdiction whose securities are quoted in the US OTC markets.

Shanghai Stock Exchange introduces measures to prevent speculation on new shares

The Shanghai Stock Exchange has recently released new regulations for preventing speculation and curb over-speculation on new shares. The new rules strengthened the regulatory measures on new share trading and defined the abnormal trading behaviors for new shares. Secondly, multiple regulatory measures have been adopted to crack down on new share speculation Notice: Undefined variable: indexpage in /home/wfe/public_html/focus/2012-06/footer.php on line 2