Global securities regulation standard setter, the International Organization of Securities Commissions (IOSCO), has published a consultation paper on regulating crypto asset trading platforms (CTPs). IOSCO publicized the paper in an official news release on May 28.
According to the news release, IOSCO’s membership regulates over 95% of the world's securities markets in more than 115 jurisdictions. The activities of the organization aim to develop and promote adherence to an internationally recognized, consistent standard for regulatory oversight and enforcement within the global securities sector.
The new consultation paper — entitled “Issues, Risks, and Regulatory Considerations Relating to Crypto-Asset Trading Platforms” — solicits feedback from the public on a set of issues, risks and other central considerations that have been identified by IOSCO in regard to CTPs. All such comments must be submitted by July 29 2019, the paper notes.
These central considerations outlined in the report are the following: access to CTPs, safeguarding assets, conflicts of interest, CTP operations, market integrity, price integrity and technology.
IOSCO notes that its approach aligns with a G20 2018 communique that appealed to international standard setting bodies “to continue their monitoring of crypto-assets and their risks, according to their respective mandates, and assess multilateral responses as needed.”
As a guiding principle, the news release states that where a given regulatory authority has deemed that a crypto asset qualifies as a security and thus falls within its regulatory purview, the asset should fall subject to the traditional frameworks and objectives of existing securities laws.
Within the report, IOSCO nonetheless recognizes that the regulation of CTPs may present potentially novel and unique issues for regulators to tackle. It thus proposes that its detailed analysis of considerations may serve relevant regulatory agencies as a baseline as they endeavor to construct their approach to the new sector.
In January 2018, IOSCO had established an Initial Coin Offering Consultation Network to review experiences and concerns related to the ICO market. The organization addressed the challenges of the emerging asset class in its annual conference last year, impacting national securities regulators’ evolving approaches.