05-25-2023, 01:00 PM
IOSCO’s Crypto Policy Aims at Market Manipulation, Conflict of Interest
<p>
The International Organization of Securities
Commissions (IOSCO), a global body for securities regulators, has put forward
18 recommendations to regulate the global crypto industry. The recommendations
cover six key areas such as market manipulation, insider trading and fraud
as well as conflict of interest arising from ‘vertical integration’ of various
activities and functions by crypto firms. </p><p class="MsoNormal text-align-justify">Other key areas covered include cross-border
risks and regulatory cooperation, custody and client asset protection,
operational and technological risk, and retail access, suitability and
distribution. The <a href="https://www.financemagnates.com/tag/iosco/" target="_blank" rel="follow">global regulatory body</a> plans to finalize the recommendations around the fourth quarter of 2023.</p><blockquote class="twitter-tweet"><p lang="en" dir="ltr">IOSCO announces global crypto regulation recommendations. ? Link to the Consultation Report ? <a href="https://t.co/Je0UQulWFs">https://t.co/Je0UQulWFs</a>? Link to Press Release ? <a href="https://t.co/gf9qXuYdwE">https://t.co/gf9qXuYdwE</a>? Link to the Crypto-Asset Roadmap 2022/2023 ? <a href="https://t.co/Rcth0NkMmt">https://t.co/Rcth0NkMmt</a><a href="https://twitter.com/hashtag/CryptoAssets?src=hash&ref_src=twsrc%5Etfw">#CryptoAssets</a><a href="https://twitter.com/hashtag/Regulation?src=hash&ref_src=twsrc%5Etfw">#Regulation</a><a href="https://t.co/aqXPmUmQJN">pic.twitter.com/aqXPmUmQJN</a></p>— IOSCO Press (@IOSCOPress) <a href="https://twitter.com/IOSCOPress/status/1660950018033893377?ref_src=twsrc%5Etfw">May 23, 2023</a></blockquote><p class="MsoNormal text-align-justify">IOSCO Addresses Multiple Issues </p><p class="MsoNormal text-align-justify">According to <a href="https://www.financemagnates.com/tag/iosco/" target="_blank" rel="follow">IOSCO</a>, many crypto firms adopt a
‘vertically integrated’ business model where they engage in multiple activities, such as <a href="https://www.financemagnates.com/terms/e/exchange/" class="terms__secondary-term" id="b5da6e64-2afe-421d-9b81-16404b7d59d6">exchange</a> trading, brokerage, market-marking, custody and settlements
under ‘one roof’. The global watchdog believes that this creates conflicts of
interest for the firms. </p><p class="MsoNormal text-align-justify">It is, therefore, proposing that crypto asset service providers (CASPs) should have
“effective governance and organizational requirements in place to effectively
address” these conflicts. Additionally, the commission believes that measures, such as obtaining separate
registrations and adopting legal disaggregation, could solve the issue. </p><p class="MsoNormal">Furthermore, IOSCO believes that
a conflict of interest arises in situations where a CASP may front-run
clients’ orders in favour of their own transactions or those of a related party. Front running is a type of market manipulation in which a trader or broker takes advantage of non-public information about a large upcoming trade to make a profit. In this type of scenario, the trader or broker typically buys or sells the security before the public announcement of the trade in order to profit from the expected price movement.</p><p class="MsoNormal">To address this, IOSCO is calling on crypto firms to put in place “systems, policies
and procedures that provide for fair, orderly, timely <a href="https://www.financemagnates.com/terms/e/execution/" class="terms__main-term" id="60010adb-9e25-4bff-9822-c9210deec853">execution</a> and in the best
interest of clients.”</p><p class="MsoNormal">On market manipulation, IOSCO explained that
the crypto industry’s market integrity risks have been worsened by the “fragmented,
cross-border nature” of crypto markets. The risks include manipulative market
practices, such as Ponzi schemes and wash trading, as well as insider dealing and
fraudulent, misleading or insufficient disclosure. </p><p class="MsoNormal">To address this, IOSCO is calling
for “effective systems and controls to identify and monitor for manipulative
market practices and to prevent leakage of insider information.”</p><p class="MsoNormal text-align-justify">IOSCO Launches Public Consultation</p><p class="MsoNormal text-align-justify">IOSCO explained <a href="https://www.iosco.org/library/pubdocs/pdf/IOSCOPD734.pdf" class="L-Affiliate-Tagged" target="_blank" rel="follow">the recommendations</a> were developed by the IOSCO Board's Fintech
Task Force (FTF) in alignment with the organization’s <a href="https://www.iosco.org/library/pubdocs/pdf/IOSCOPD705.pdf" class="L-Affiliate-Tagged" target="_blank" rel="follow">Crypto-Asset Roadmap</a> published in June 2022. Jean-Paul Servais, the Chairperson of IOSCO, noted that the recommendation “is the outcome of an
intense period of regulatory risk analysis, information sharing and capacity
building.”</p><p class="MsoNormal">“Crypto-asset service providers need to
address unacceptable conflicts of interest and take far more seriously the
right of clients to have their monies and assets carefully minded and accounted
for,” added Lim Tuang Lee, the Chairperson of the IOSCO Board-Level Fintech Task
Force.</p><p class="MsoNormal text-align-justify">In <a href="https://www.iosco.org/news/pdf/IOSCONEWS693.pdf" target="_blank" rel="follow">a statement</a> released on Tuesday, IOSCO disclosed that it has opened a public consultation and <a href="https://www.iosco.org/library/pubdocs/pdf/IOSCOPD734.pdf" class="L-Affiliate-Tagged" target="_blank" rel="follow">issued a consultation
report</a> on the
recommendations and expects to receive comments until July 31, 2023. After
consultation, the body also expects that its 130 members across the globe “will
review their current regulatory frameworks to ensure that they comply with the
standards and fix any gaps promptly.”</p><p>Hidden Road taps Crossover Markets; Equiti in Uganda; read today's nuggets.</p>
This article was written by Pedro Ferreira at www.financemagnates.com.
https://www.financemagnates.com//cryptoc...-interest/
<p>
The International Organization of Securities
Commissions (IOSCO), a global body for securities regulators, has put forward
18 recommendations to regulate the global crypto industry. The recommendations
cover six key areas such as market manipulation, insider trading and fraud
as well as conflict of interest arising from ‘vertical integration’ of various
activities and functions by crypto firms. </p><p class="MsoNormal text-align-justify">Other key areas covered include cross-border
risks and regulatory cooperation, custody and client asset protection,
operational and technological risk, and retail access, suitability and
distribution. The <a href="https://www.financemagnates.com/tag/iosco/" target="_blank" rel="follow">global regulatory body</a> plans to finalize the recommendations around the fourth quarter of 2023.</p><blockquote class="twitter-tweet"><p lang="en" dir="ltr">IOSCO announces global crypto regulation recommendations. ? Link to the Consultation Report ? <a href="https://t.co/Je0UQulWFs">https://t.co/Je0UQulWFs</a>? Link to Press Release ? <a href="https://t.co/gf9qXuYdwE">https://t.co/gf9qXuYdwE</a>? Link to the Crypto-Asset Roadmap 2022/2023 ? <a href="https://t.co/Rcth0NkMmt">https://t.co/Rcth0NkMmt</a><a href="https://twitter.com/hashtag/CryptoAssets?src=hash&ref_src=twsrc%5Etfw">#CryptoAssets</a><a href="https://twitter.com/hashtag/Regulation?src=hash&ref_src=twsrc%5Etfw">#Regulation</a><a href="https://t.co/aqXPmUmQJN">pic.twitter.com/aqXPmUmQJN</a></p>— IOSCO Press (@IOSCOPress) <a href="https://twitter.com/IOSCOPress/status/1660950018033893377?ref_src=twsrc%5Etfw">May 23, 2023</a></blockquote><p class="MsoNormal text-align-justify">IOSCO Addresses Multiple Issues </p><p class="MsoNormal text-align-justify">According to <a href="https://www.financemagnates.com/tag/iosco/" target="_blank" rel="follow">IOSCO</a>, many crypto firms adopt a
‘vertically integrated’ business model where they engage in multiple activities, such as <a href="https://www.financemagnates.com/terms/e/exchange/" class="terms__secondary-term" id="b5da6e64-2afe-421d-9b81-16404b7d59d6">exchange</a> trading, brokerage, market-marking, custody and settlements
under ‘one roof’. The global watchdog believes that this creates conflicts of
interest for the firms. </p><p class="MsoNormal text-align-justify">It is, therefore, proposing that crypto asset service providers (CASPs) should have
“effective governance and organizational requirements in place to effectively
address” these conflicts. Additionally, the commission believes that measures, such as obtaining separate
registrations and adopting legal disaggregation, could solve the issue. </p><p class="MsoNormal">Furthermore, IOSCO believes that
a conflict of interest arises in situations where a CASP may front-run
clients’ orders in favour of their own transactions or those of a related party. Front running is a type of market manipulation in which a trader or broker takes advantage of non-public information about a large upcoming trade to make a profit. In this type of scenario, the trader or broker typically buys or sells the security before the public announcement of the trade in order to profit from the expected price movement.</p><p class="MsoNormal">To address this, IOSCO is calling on crypto firms to put in place “systems, policies
and procedures that provide for fair, orderly, timely <a href="https://www.financemagnates.com/terms/e/execution/" class="terms__main-term" id="60010adb-9e25-4bff-9822-c9210deec853">execution</a> and in the best
interest of clients.”</p><p class="MsoNormal">On market manipulation, IOSCO explained that
the crypto industry’s market integrity risks have been worsened by the “fragmented,
cross-border nature” of crypto markets. The risks include manipulative market
practices, such as Ponzi schemes and wash trading, as well as insider dealing and
fraudulent, misleading or insufficient disclosure. </p><p class="MsoNormal">To address this, IOSCO is calling
for “effective systems and controls to identify and monitor for manipulative
market practices and to prevent leakage of insider information.”</p><p class="MsoNormal text-align-justify">IOSCO Launches Public Consultation</p><p class="MsoNormal text-align-justify">IOSCO explained <a href="https://www.iosco.org/library/pubdocs/pdf/IOSCOPD734.pdf" class="L-Affiliate-Tagged" target="_blank" rel="follow">the recommendations</a> were developed by the IOSCO Board's Fintech
Task Force (FTF) in alignment with the organization’s <a href="https://www.iosco.org/library/pubdocs/pdf/IOSCOPD705.pdf" class="L-Affiliate-Tagged" target="_blank" rel="follow">Crypto-Asset Roadmap</a> published in June 2022. Jean-Paul Servais, the Chairperson of IOSCO, noted that the recommendation “is the outcome of an
intense period of regulatory risk analysis, information sharing and capacity
building.”</p><p class="MsoNormal">“Crypto-asset service providers need to
address unacceptable conflicts of interest and take far more seriously the
right of clients to have their monies and assets carefully minded and accounted
for,” added Lim Tuang Lee, the Chairperson of the IOSCO Board-Level Fintech Task
Force.</p><p class="MsoNormal text-align-justify">In <a href="https://www.iosco.org/news/pdf/IOSCONEWS693.pdf" target="_blank" rel="follow">a statement</a> released on Tuesday, IOSCO disclosed that it has opened a public consultation and <a href="https://www.iosco.org/library/pubdocs/pdf/IOSCOPD734.pdf" class="L-Affiliate-Tagged" target="_blank" rel="follow">issued a consultation
report</a> on the
recommendations and expects to receive comments until July 31, 2023. After
consultation, the body also expects that its 130 members across the globe “will
review their current regulatory frameworks to ensure that they comply with the
standards and fix any gaps promptly.”</p><p>Hidden Road taps Crossover Markets; Equiti in Uganda; read today's nuggets.</p>
This article was written by Pedro Ferreira at www.financemagnates.com.
https://www.financemagnates.com//cryptoc...-interest/