IFSCA Becomes Associate Member of IOSCO

• 02 Jan 2021

Why in News

The International Financial Services Centres Authority (IFSCA) has become an associate member of the International Organization of Securities Commissions (IOSCO).

• Securities and Exchange Board of India (SEBI) is an ordinary member of IOSCO.

Key Points

• International Financial Services Centres Authority (IFSCA):
  
  • About:
    
    • It was established in April 2020 under the International Financial Services Centres Authority Act, 2019. It is headquartered at GIFT (Gujarat International Finance Tec-City), Gandhinagar in Gujarat.
    • It is a unified authority for the development and regulation of financial products, financial services and financial institutions in the International Financial Services Centre (IFSC) in India.
      
      • An IFSC caters to customers outside the jurisdiction of the domestic economy.
    • It has been established to promote ease of doing business in IFSC and to provide a world class regulatory environment.
  • Objective:
    
    • To develop a strong global connect and focus on the needs of the Indian economy as well as to serve as an international financial platform for the entire region and the global economy as a whole.
• International Organization of Securities Commissions (IOSCO):
  
  • About:
    
    • Founded: April 1983
    • Headquarters: Madrid, Spain
      
      • IOSCO Asia Pacific Hub is located in Kuala Lumpur, Malaysia.
    • It is the international organization that brings together the world's securities regulators, covering more than 95% of the world’s securities markets, and is the global standard setter for the securities sector.
    • It works closely with the G20 (Group of Twenty) and the Financial Stability Board (FSB) in setting up the standards for strengthening the securities markets.
      
      • The FSB is an international body that monitors and makes recommendations about the global financial system.
    • The IOSCO Objectives and Principles of Securities Regulation have been endorsed by FSB as one of the key standards for sound financial systems.
    • IOSCO's enforcement role extends to matters of interpretation of International Financial Reporting Standards (IFRS), where IOSCO maintains a (confidential) database of enforcement actions taken by member agencies.
      
      • IFRS is an accounting standard that has been issued by the International Accounting Standards Board (IASB) with the objective of providing a common accounting language to increase transparency in the presentation of financial information.
  • Objectives:
    
    • To cooperate in developing, implementing and promoting adherence to internationally recognized and consistent standards of regulation, oversight and enforcement in order to protect investors, maintain fair, efficient and transparent markets, and seek to address systemic risks;
    • To enhance investor protection and promote investor confidence in the integrity of securities markets, through strengthened information exchange and cooperation in enforcement against misconduct and in supervision of markets and market intermediaries; and
    • To exchange information at both global and regional levels on their respective experiences in order to assist the development of markets, strengthen market infrastructure and implement appropriate regulation.
• Significance of the Membership:
  
  • It would provide IFSCA the platform to exchange information at the global level and regional level on areas of common interests.
  • The IOSCO platform would enable IFSCA to learn from the experiences and best practices of the regulators of other well established financial centres.

Source:PIB