The International Organization of Securities Commissions (IOSCO) has published its final report on policy recommendations for the regulation of crypto and digital assets. The 18 recommendations cover six key areas and were designed to “support greater consistency with respect to regulatory frameworks and oversight in IOSCO member jurisdictions”, and to “address concerns related to market integrity and investor protection”.
The six key areas of focus are: 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; operation and technological risk; retail access, suitability, and distribution.
The recommendations cover a range of activities performed by crypto asset service providers (CASPs), including offering, admission to trading, ongoing trading, settlement, market surveillance, custody, marketing, and distribution to retail investors.
Recommendation one, for example, has to do with the common standards of regulatory outcomes. IOSCO suggests that regulators “use existing frameworks or new frameworks to regulate and oversee crypto asset trading, other crypto asset services, and the issuing, marketing, and selling of crypto assets”. In addition, the regulatory approach should “seek to achieve regulatory outcomes for investor protections and market integrity that are the same as, or consistent with, those that are required in the traditional financial markets”.
Although the report is addressed to relevant authorities, IOSCO encourages CASPs and all participants in crypto asset markets to “carefully consider the expectations and outcomes articulated through the recommendations and the respective supporting guidance in the conduct of their activities including registered, licensed, and cross-border activities”.