IOSCO Mulls Wider Regulatory Remit; Eyes Product Regulation
October 09 2009 - 9:19AM
Dow Jones News
The International Organization of Securities Commissions, or
IOSCO, Friday said it is mulling expanding the scope of regulation
following the financial crisis, including whether to more directly
oversee investment products.
"We're giving consideration to the perimeter of regulation...to
emerging risks within or outside that perimeter," IOSCO technical
committee chairperson Kathleen Casey said, referring to systemic
risks that could arise. Casey is also the commissioner of the U.S.
Securities and Exchange Commission.
The statement, echoed by other IOSCO functionaries and made
during the closing press conference of an IOSCO meeting here,
signal a far feistier tone on the part of financial regulators
globally. Public opinion favors tighter financial regulation after
many investors lost vast sums in the financial crisis, with most
banks still cautioning against the potentially harmful effects of
regulation on competition.
"Much mischief occurred in areas exempt from regulation, so
we're looking now at OTCs [over-the-counter financial products],
credit ratings agencies and hedge funds, and those areas link back
to investor confidence," Jane Diplock, IOSCO executive committee
chairperson, said. Diplock is also chairman of New Zealand's
Securities Commission.
This past summer, IOSCO began a push for hedge funds worldwide
to be registered with regulators and to disclose information aimed
at identifying and quantifying how much risk they pose to the
financial system.
Earlier Friday at the IOSCO gathering, regulators in Europe and
the U.S. pledged to attempt to coordinate supervision of
credit-ratings agencies such as Standard & Poor's Corp.,
Moody's Corp. (MCO) and Fitch Ratings, which have been blamed by
some critics for exacerbating the financial crisis after giving
overly positive ratings to certain kinds of debt, including some
backed by subprime mortgages.
Body Web site: http://www.iosco.org
-By Katharina Bart, Dow Jones Newswires; +41 43 443 8043;
katharina.bart@dowjones.com