Global Regulatory Body IOSCO Sets Policy Recommendations for Crypto Markets

By: Eliza Bennet

The International Organization of Securities Commissions (IOSCO), a global regulatory body for overseeing securities markets, has published its conclusive report establishing policy recommendations for the crypto and digital asset market. These principles-based and outcomes-focused guidelines aim to harmonize regulatory frameworks across jurisdictions, addressing key concerns related to market integrity and investor protection in digital asset activities.

Industrial consistency in regulating digital asset activities worldwide is at the heart of these recommendations. The aim is to minimize regulatory arbitrage and protect retail investors exposed to crypto market risks. The IOSCO emphasizes the need for regulatory frameworks that are adaptable yet consistent in their treatment of crypto-asset activities, including stablecoins.

The recommendations span vital areas including conflicts of interest, market manipulation, cross-border risks, custody, asset protection, operational risks, and retail distribution. They underscore clear expectations to control and monitor manipulative market practices and prevent misuse of inside information. Consistent with IOSCO's goals and essential principles for securities regulation and supporting standards, recommendations also encompass standards for listing and delisting crypto-assets, market surveillance, disclosure of custody and safekeeping arrangements, and ensuring proper retail distribution practices.

The proposed guidelines exhibit flexibility in implementation and urge regulators to assess existing frameworks' applicability to digital assets and contemplate specific requirements to address segment risks and investor damage. Recognizing stablecoins' significance in the crypto market, they extend to these assets with additional guidance on disclosures and custody of reserves.