The technical committee (TC) of the International Organisation of Securities Commissions (Iosco) has published its final report on the compliance function at market intermediaries. The TC prepared this paper to set out a number of supplementary principles to Principle 23 with means for implementation to assist intermediaries to increase the effectiveness of their compliance function.
The report is based on a survey of current regulatory requirements in the jurisdictions of standing committee three (SC3) members, supplemented by the comments received on the consultative version of this report. The report places the focus on the securities regulatory requirements of these intermediaries. However, Iosco expects market intermediaries to comply with all applicable regulatory requirements, stating that “it should also be noted that, to the greatest extent practicable, the principles set forth in this report are consistent with those developed by the Basel Committee, since banks are also involved in the securities markets and subject to securities regulation.”
Seeking flexibility, the principles in the report are intended to be adaptable to the nature, scale and complexity of a market intermediary’s business and operations, particulary according to the level of risk a firm’s activities entail, both for the financial system as a whole and for the firm’s clients: “Even where a market intermediary has a small operation with a simple business, it should consider the appropriateness of adopting the means for implementation outlined under each principle.”
The main issues outlined by the report include: establishing a compliance function; the role of senior management and governing authority; independence and ability to act; qualification of compliance personnel; assessment of the effectiveness of the compliance function; regulatory supervision and cross-border compliance arrangements.
Click here to see a full copy of the report.
More on Regulation
Response to criticism of deference to big banks
Heavy regulatory costs and fragile systems will be problems in 2015
Banks praised for leaving high-risk markets, but more work needed
Slow-moving investigations mean misdeeds will linger on
Sign up for Risk.net email alerts
Sponsored webinar: IBM
Watch highlights of this year's London conference
Operational risk and the challenges of defining and dealing with conduct risk
Watch discussions and speakers from our North America conference
There are no comments submitted yet. Do you have an interesting opinion? Then be the first to post a comment.