IOSCO publishes a Thematic Review on the status of implementation of its recommendations on Technological Challenges to Effective Market Surveillance issued in 2013.
Conducted by the IOSCO Assessment Committee, this Thematic Review assessed the consistency of outcomes arising from the implementation by market authorities in 34 IOSCO member jurisdictions.
The Review found that most market authorities have implemented the recommendations and have made significant progress in addressing technological challenges to market surveillance, particularly in more complex markets.
However, some issues of concern were identified, noting that some regulators lack the necessary organizational and technical capabilities to conduct effective surveillance of their markets in the midst of rapid technological developments.
The absence of regular review of the surveillance capabilities of market authorities was also identified as an issue of concern. For some markets with multiple trading venues, difficulties were identified for the collection and comparison of data across these venues. The inability of many regulators to map their cross-border surveillance capabilities was also identified as an issue of concern, given the risks in an increasingly globalized financial landscape.
Jean-Paul Servais, IOSCO Board Chair, stated: “Securities regulators must always endeavour to keep abreast of technological developments affecting their markets. I am pleased that IOSCO’s review highlights the significant progress made by the majority of our members in addressing technological challenges to market surveillance in line with IOSCO’s 2013 recommendations. In today’s borderless environment, regulators need both organizational and technical capabilities to conduct effective surveillance of their markets. Systematic and robust analysis of accessible, reliable and good quality data should remain a priority for all securities regulators.”
Laurent van Burik, Chair of IOSCO’s Assessment Committee, said: “Market surveillance has made significant improvements over the years in different jurisdictions, yet the challenge of addressing market abuse remains significant for market authorities, especially in the wake of rapid technological advances. IOSCO members should ensure that they have adequate and up-to-date powers, tools, and resources for effective market surveillance.”