The International Organization of Securities Commissions (IOSCO) today published a consultation report on global developments in securitization regulation.
IOSCO had already published earlier recommendations aimed at regulatory initiatives to support recovery of securitization markets. In September 2009 the regulator published a report on the unregulated financial markets and products and in 2010 it published recommendations for market interventions and securitization in emerging markets.
This latest consultation paper provides a background to the earlier work the regulator did; it also provides a snapshot of global securitization activity; and makes observations about regulatory approaches in jurisdictions covered by the work and outlines and assesses the extent of differences.
The paper also makes policy recommendations addressing differences in approaches to risk retention; improvements in transparency; and measures to standardize disclosure.
"The Consultation Paper - which follows analysis of regulatory developments in over 20 jurisdictions - provides us with an opportunity to work toward greater harmonization in our approach to regulation of this important sector," said Edouard Vieillefond, co-chair of IOSCO's task force on unregulated markets and products and managing director of the Autorité des Marches Financiers (AMF).
The report is based on a survey of member jurisdictions and builds on earlier work undertaken by the U.S. Securities Exchange Commission and the European Commission on developments in the U.S. and the E.U.
IOSCO said in a press release today that the latest report responds to a request from the Financial Stability Board (FSB) to strengthen oversight and regulation of the shadow banking system. The FSB asked IOSCO to look at the requirements for risk retention and measures enhancing transparency and standardization of securitization products, and to develop policy recommendations as necessary.
The regulator will open the consulation paper up for industry commentary until August 6, 2012.