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FEATURES OF DEVELOPED CAPITAL MARKET: THE INTERNATIONAL ORGANIZATION OF SECURITIES COMMISSION (IOSCO)

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The International Organization of Securities Commissions (IOSCO), established in 1983 for the purpose to bring together the world‟s securities regulators. It is a recognized global standard setter for the securities sector. 

IOSCO develops, implements, and promotes adherence to internationally recognized standards for securities regulation, and is working intensively with the G20 and the Financial Stability Board (FSB) on the global regulatory reform agenda. 

IOSCO‟s membership regulates more than 95% of the world‟s securities markets. Its members include over 120 securities, regulators and 80 other securities markets participants (i. e. stock exchanges, financial regional and international organizations etc.).

IOSCO is the only international financial regulatory organization which includes all the major emerging markets jurisdictions within its membership. IOSCO provides comprehensive technical assistance to its members which regulate the emerging market. 

IOSCO OBJECTIVES

IOSCO has been established for achieving the following objectives: 

(i) To Protect Investor: To enhance investor protection and promote investor confidence in the integrity of securities markets, through strengthened information exchange and cooperation in enforcement against misconduct and in supervision of markets and market intermediaries; 

(ii) To Ensure that Markets are Fair, Efficient and Transparent: To cooperate in developing, implementing and promoting adherence to internationally recognized and consistent standards of regulation, oversight and enforcement in order to protect investors, maintain fair, efficient and transparent markets, and seek to address systemic risks; and 

(iii) To Reduce Systemic Risk: To reduce systemic (universal) risk, IOSCO exchanges information at both global and regional levels on their respective experiences in order to assist the development of markets, strengthen market infrastructure and implement appropriate regulation.

MEMBERSHIP OF IOSCO:

ORDINARY MEMBER: Ordinary members of IOSCO are those members who are primarily working as regulators of securities or futures markets in a jurisdiction and each ordinary member has one vote. 

Example: Securities and Exchange Board of India (SEBI) is the regulator of Indian Securities Market. Securities Exchange Commission is the regulator of USA Securities Market. 

In other words, all governmental body which are responsible for regulation of securities can only be entered as ordinary member under the category. The ordinary membership of a self – regulatory body admitted to IOSCO will lapse if a governmental regulatory body from the same jurisdiction becomes the ordinary member for that jurisdiction.

ASSOCIATE MEMBER: Associate members of IOSCO are those members which are other securities and/or futures regulators in a jurisdiction, if that jurisdiction has more than one. 

Example: The Commodity Futures Trading Commission, the International Commission of Securities and the North American Securities Administrators‟ Association in the United States are associate members of IOSCO with the U. S. Securities and Exchange Commission being the ordinary members for the United States. 

Note: Associate members have no rights to vote in IOSCO. A self-regulatory body is not eligible for associate membership.

AFFILIATE MEMBER: Affiliate members of IOSCO are those members other than the regulators.

Example: Stock exchanges, self – regulatory organizations, and various stock market industry associations. Affiliate members have no voting rights.  In other words, A self – regulatory body (SRO), or an international body, with an appropriate interest in securities regulation is eligible for this category of membership. 

Note: Currently, IOSCO has 145 members: 118 ordinary members, 12 associate members and 15 affiliate members.

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