On 23 May 2023, the International Organization of Securities Commissions (IOSCO) published a consultation report containing 18 proposed recommendations intended to help IOSCO members apply IOSCO’s Objectives and Principles for Securities Regulation and relevant supporting IOSCO standards, recommendations and good practices to crypto-asset activities within their jurisdictions.
The proposed recommendations cover six key areas:
- Conflicts of interest arising from vertical integration of activities and functions.
- Market manipulation, insider trading and fraud.
- Cross-border risks and regulatory cooperation.
- Custody and client asset protection.
- Operational and technological risk.
- Retail access, suitability, and distribution.
The proposed recommendations are principles-based and outcomes-focused and are aimed at the activities performed by crypto-asset service providers (CASPs). They cover the range of activities in crypto-asset markets that involve CASPs from offering, admission to trading, ongoing trading, settlement, market surveillance and custody as well as marketing and distribution (covering advised and non-advised sales) to retail investors.
The deadline for comments on the consultation report is 31 July 2023. IOSCO plans to finalise the recommendations in early Q4 this year.
The proposed recommendations do not cover activities, products or services provided in the so-called ‘decentralised finance’ or ‘DeFi’ area. A consultation report containing proposed recommendations will be published later this summer.