On 16 November 2023, the International Organization of Securities Commissions (IOSCO) published a final report containing policy recommendations for the regulation of crypto and digital assets. The recommendations are principles-based and outcomes-focused and are aimed at the activities performed by crypto-asset service providers (CASPs). In line with IOSCO’s established approach for financial market regulation, the recommendations are addressed to relevant authorities. They look to support jurisdictions seeking to establish compliant markets for the trading of crypto-assets in the most effective way possible.
The recommendations cover six key areas, consistent with the IOSCO Objectives and Principles for Securities Regulation and relevant supporting IOSCO standards, recommendations, and good practices:
- Conflicts of interest arising from vertical integration of activities and functions.
- Market manipulation, insider trading and fraud.
- Custody and client asset protection.
- Cross-border risks and regulatory cooperation.
- Operational and technological risk.
- Retail distribution.
IOSCO separately consulted on proposed policy recommendations for ‘decentralised finance’ or ‘DeFi’ on 7 September 2023, which will be finalised by the end of this year. At that time, IOSCO will also publish an umbrella note explaining in more detail the interoperability between the two sets of recommendations.