IOSCO, the Board of the International Organization of Securities Commissions, has published no fewer than three separate reports today.
Mechanisms for Trading Venues to Effectively Manage Electronic Trading Risks and Plans for Business Continuity provides a comprehensive overview of the steps trading venues take to manage the risks associated with electronic trading and the ways they plan for and manage disruptions through BCPs (business continuity plans). As technology continues to evolve, leading to different ways to operate and access markets, so too will trading venues have to continuously consider the impact of these changes and adapt, to protect themselves, their participants and investors.
Market Intermediary Business Continuity and Recovery Planning, sets forth two standards for regulators and sound practices that regulators could consider as part of their supervision of intermediaries. These sound practices may also prove useful to intermediaries who are developing and implementing business continuity plans. Appendix B contains the list of standards and sound practices.
As in the case of trade venues, not every sound practice will be appropriate or equally effective for all market intermediaries. However, IOSCO would still encourage individual market intermediaries to consider these sound practices where relevant to their activities
Sound Practices at Large Intermediaries Relating to the Assessment of Creditworthiness and the Use of External Credit Ratings recommends 12 sound practices that regulators could consider as part of their supervision of market intermediaries.
Large market intermediaries also may find the sound practices useful in the development and implementation of effective alternative methods for the assessment of creditworthiness. IOSCO says it believes that identifying sound practices regarding suitable alternatives to credit ratings should reduce the overreliance on credit rating agencies (CRAs) for credit risk assessment. Such a development would help increase investor protection, while contributing to market integrity and financial stability.