Group items tagged

The International Organization of Securities Commissions (IOSCO) published measures that members should consider when determining their policy and enforcement approaches to retail online offerings and marketing. Part of the risks IOSCO identified include using gamification and other psychological techniques to lure new persons into investing in virtual assets. The IOSCO sees the use of celebrities or influencers to market projects as a major threat, with the report noting that these "finfluencers" can wield a great degree of control for new investors in the space

The International Organization of Securities Commissions (IOSCO) published its conclusive report containing policy suggestions for crypto-asset and digital asset markets, after a consultation period that started in May 2023. The recommendations aim to help establish a coordinated global regulatory response to the risks posed by crypto-asset service providers (CASPs), including market abuse, conflict of interest, client asset protection and disclosures. The regulatory approach taken is consistent with IOSCO's principles and associated standards for securities markets regulation, and IOSCO denied crypto industry requests for a bespoke regime for stablecoins. https://www.iosco.org/library/pubdocs/pdf/IOSCOPD747.pdf

The International Organization of Securities Commissions ( IOSCO) issued for consultation detailed principles-based and outcomes-focused recommendations as to how to regulate crypto-assets, aimed at the activities performed by crypto-asset service providers (CASPs). It proposes 18 policy recommendations that IOSCO plans to finalize in Q4 2023 to support greater consistency with respect to regulatory frameworks and oversight in its member jurisdictions, to address concerns related to market integrity and investor protection arising from crypto-asset activities. The proposed recommendations do not cover "decentralized finance" (DeFi).

IOSCO published its Final Report on Investor Education surrounding Crypto-Assets. This Report summarizes the results of a survey distributed to members of IOSCO's Committee for Retail Investors (C8) in autumn last year about retail investor behavior, demographics, and experiences with crypto-assets. Crypto-assets have been a key priority for IOSCO for some time and in 2022 it established a Board-level FinTech Task Force to develop, oversee, deliver and implement IOSCO's work with respect to FinTech and crypto-assets. Early work has shown that investors are drawn to invest in crypto-assets for three key reasons: (1) fear of missing out" ("FOMO") or as a speculative investment; (ii) low cost of entry; and (iii) advice from friends and/or social media. The report emphasizes that regulators need to become adept at using social media themselves to reach investors in the silos focused on digital currencies.

The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) published for public consultation preliminary guidance that confirms and clarifies that systemically-important stablecoin arrangements (SAs) should observe international standards for payment, clearing and settlement systems. The report proposes additional guidance on how certain aspects of the CPMI/IOSCO Principles for Financial Market Infrastructures (PFMIs) apply to the novel features of SAs.

IOSCO published a report that describes how special purpose acquisition companies (SPACs) work and outlines the development of SPAC markets. It then describes the regulatory approaches taken to SPACs and shows how these differ from those adopted for traditional initial public offereings (IPOs). SPACs may have some advantages and disadvantages compared to traditional IPOs, but both result in the same outcome and share some key risks. Accordingly, their regulatory treatment may be expected to be similar. However, differences in their mechanics (mainly because the SPAC process for bringing a private company onto the public market takes place in two steps compared to the "one step" IPO) mean that the regulatory treatment of SPACs may need to be adapted appropriately, and the survey confirms that in many respects the treatment of SPACs is not identical to that of an IPO.

IOSCO published a report that describes the issues and risks associated with crypto-asset trading platforms and sets out key considerations to assist regulatory authorities in addressing these issues.

The International Organization of Securities Commissions (IOSCO) published nine decentralized finance (DeFi) policy recommendations covering six key areas: (1) understanding DeFi arrangements and structures, (2) achieving common standards of regulatory outcomes, (3) identification and management of key risks (4) clear, accurate and comprehensive disclosures (5) enforcement of applicable laws, and (6) cross-border cooperation. They are meant to be complementary to the crypto and digital assets markets recommendations issued in November 2023.

The Committee on Payments and Market Infrastructures (CPMI) and International Organization of Securities Commissions (IOSCO) published their final "same risk, same regulation" guidance on regulating stablecoin arrangements (SAs). The guidance highlights that the transfer function of an SA is comparable to the transfer function performed by other types of financial market infrastructure (FMI). As a result, an SA that performs this transfer function is considered an FMI for the purpose of applying the Principles for Financial Market Infrastructures (PFMI) and, if determined by relevant authorities to be systemically important, the SA as a whole would be expected to observe all relevant principles in the PFMI.

IOSCO suggests that any crypto assets considered securities should follow the same regulatory principles as conventional securities but does not provide guidance on how to define crypto assets as securities in the first place.

In May 2019, IOSCO published "Issues, Risks and Regulatory Considerations Relating to Crypto-Asset Trading Platforms." The focus of the report is on the secondary market trading of crypto-assets on CTPs, assuming that the regulatory authority has the legal authority to regulate those assets.

Existing securities rules could apply to "stablecoin" digital currency initiatives such as Facebook's Libra project to help realize its benefits.

The Monetary Authority of Singapore (MAS) published a report proposing a framework for designing open, interoperable networks for digital assets (i.e. tokenized real-economy and financial assets ). The report also considers how the CPMI-IOSCO principles for financial market infrastructures (PFMIs) can be applied to evolving models of digital asset networks, based on industry pilots launched under Project Guardian, MAS's collaborative initiative with the financial industry to test the feasibility of applications in asset tokenization and decentralized finance (DeFi).  The MAS also announced an expansion of Project Guardian to more asset classes.

The International Organization of Securities Commissions published a report on DeFi, highlighting a wide array of risks associated with it. "As DeFi continues to expand, both a granular and holistic understanding of the DeFi market will improve authorities' ability to understand the regulatory implications of this emergent market with respect to their own jurisdictions."

The Bank of England published its supervision of financial market infrastructures 2022 Annual Report. It reports that the Financial Services & Markets Bill, published in July 2022 and scheduled to complete in 2023 seeks to bring systemic stablecoins into the Bank's regulatory remit, and bring the UK regime in line with standards discussed. The Bank is now working on a regulatory framework for systemic stablecoins and plans to consult on this in due course. Alongside regulation, another key component of a stablecoin regime is the potential application of the FMI Special Administrative Regime to systemic stablecoin firms. The Bank, working with His Majesty's Treasury, will continue to develop this regime to ensure it reflects international CPMI-IOSCO guidance.

Global stablecoin initiatives may, depending on their structure, present features that are typical of regulated securities or other regulated financial instruments or services. This paper identifies possible implications that global stablecoin proposals could have for securities market regulators.

The Board of the International Organization of Securities Commissions is seeking comments on a consultation paper that describes the issues associated with crypto-asset trading platforms (CTPs) and sets forth key considerations to assist regulatory authorities in addressing these issues.