A review of IOSCO's annual conference: Building securities market resilience in the post-crisis world

By: The WFE Focus Team May 2017

IOSCO’s 42nd Annual Conference was held on 14-18 May 2017.

Paul Andrews (IOSCO Secretary General) set out his vision for IOSCO and the progress made since the last mid-year AMCC in September 2016, focusing on IOSCO’s operations, and its five priority areas:

  1. strengthening structural resilience in markets;
  2. data gaps / privacy;
  3. investor protection and education;
  4. capital market development; and
  5. financial technologies and innovation.

For more detail on IOSCO’s five priorities and Paul’s vision for the organisation, please read the WFE Q&A with him here and the IOSCO press release following the event.

In addition, ahead of the conference, IOSCO’s Affiliate Members Consultative Committee (AMCC) – of which WFE is a member – met to discuss regulatory issues and priorities for the year ahead. The WFE contributed to three AMCC panels on the following topics:

1. Financial Technologies

This included other panellists from the NFA, FINRA and the FPSB. The WFE updated the group on the work on DLT, following last year’s WFE-IOSCO survey, noting:

  • Commitment and investment in DLT remains high;
  • Use cases are being rolled out;
  • The regulatory community is surprisingly engaged; and
  • WFE will be setting up a DLT user-group for FMIs.

2. Cyber Security

This session included other panellists from GFMA, IIROC and the Taiwan Stock Exchange. The WFE updated the group on the operation and work of the GLEX, including the two recently published WFE cyber principles and standards.

WFE also noted:

  • The complex patchwork of existing rules, guidelines, principles and standards that the industry needs to navigate;
  • The importance of industry engagement (and engagement with the authorities);
  • The need to consider the human/cultural aspect, not just the technological; and
  • The need for rules to provide space to innovate (but the need for innovation to not compromise system security).

3. CCP Resilience, Recovery and Resolution

The WFE moderated a panel that included participants from DTCC, CME Group, FIA, EFAMA and ISDA. Issues discussed included:

  • Focus should be on resilience and recovery – resolution is a last resort that no one wants to get to;
  • The need to ensure balanced / aligned incentives;
  • The importance of appropriate governance and disclosure;
  • Capital contributions and tools in the toolbox;
  • The boundary between recovery and resolution;
  • The effects of the leverage ratio – and in particular on portability.