The International Organization of Securities Commissions (IOSCO) has published a report aiming to support regulators dealing with retail market conduct issues following stress events, such as the COVID-19 crisis. The report identifies several retail misconduct risks appearing in the financial services industry during the pandemic. The pandemic has increased the risk of misconduct, due to the increased market volatility, working from home, revenue pressure on firms (which might cause them to offer riskier products) and pressure on retail investors (which can be exploited). These risks are ranging from fraudulent or predatory practices by unlicensed operators to incidents of inadvertent misconduct by regulated entities.
Based on these observations, the report suggests a set of measures for regulators to use in responding to the pandemic, such as:
The Clearing Member Committee of the International Swaps and Derivatives Association (ISDA) has published a report analyzing the reaction of the risk management frameworks of central counterparties (CCPs) on the COVID-19 crisis. The report concludes that the CCPs were able to withstand the health crisis, and the subsequent volatility in the markets, as only a limited number of defaults was observed. However, the report also provides two recommendations for issues that were observed in the market:
In response to the IFRS Consultation on Sustainability Reporting, IOSCO supports the establishment of a Sustainability Standards Board (SSB). This new board would function under the IFRS foundation and help to promote a global system architecture for sustainability reporting. The increased robustness in this reporting process would support audit and assurance as well as enhance market’s trust in sustainability disclosures. IOSCO also stresses that the SSB should contain expertise which is different from traditional financial reporting expertise. IOSCO is committed to helping the potential SSB with the setup of a global and transparent framework which is applicable to different company types and sectors that are active within the capital markets.