The International Organisation of Securities Commissions (Iosco) will crack down on "trading abuses", according to technical committee chairman Christopher Cox.The committee met by teleconference on November 24 to co-ordinate global regulatory measures on short selling, derivatives trading and activity by unregulated institutions.
"Iosco is central to developing co-ordinated regulatory solutions to deal with the current financial crisis," Cox said. "To be effective, the regulation of trading abuses must be co-ordinated across major markets."
Iosco will set up three technical committee task forces, focusing on short selling, unregulated financial markets and products, and unregulated financial entities.
The Securities and Futures Commission of Hong Kong will head the short-selling task force, which will concentrate on tackling abusive naked short selling and gaps in the current regulatory framework such as delivery requirements and disclosure of short positions.
Italian securities regulator Consob and the UK Financial Services Authority (FSA) will lead a task force looking at how to regulate and mitigate the risks associated with the activities of unregulated institutions, including hedge funds.
The Australian Securities and Investments Commission and the Autorité de Marché Financiers of France will direct the task force aiming to increase transparency and oversight of unregulated market segments, including over-the-counter derivatives.
All three groups will present reports in Feburary 2009, and subsequently in April at the next summit of the Group of 20 leading developed and emerging economies.
Regulators across the globe, including the US Securities and Exchange Commission and the FSA, introduced temporary short-selling rules in September in an attempt to halt the slide in bank stock prices, though some have now expired.
Concerns have also been raised over the opacity of OTC derivatives markets, with credit default swaps singled out for particular scrutiny during the ongoing financial crisis.
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