Report on the Self-Evaluation Conducted by IOSCO Members Pursuant to the 1994 IOSCO Resolution on "Commitment to Basic IOSCO Principles of High Regulatory Standards and Mutual Cooperation and Assistance"

REPORT ON THE SELF-EVALUATION CONDUCTED BYIOSCO MEMBERS PURSUANT TO THE 1994 IOSCO RESOLUTIONON “COMMITMENT TO BASIC IOSCO PRINCIPLES OF HIGHREGULATORY STANDARDS AND MUTUAL COOPERATIONAND ASSISTANCE”INTERNATIONAL ORGANIZATION OF SECURITIES COMMISSIONSNovember 1997 1Report on the Self-Evaluations Conducted byIOSCO Members Pursuant to the 1994 IOSCO Resolution on“Commitment to Basic IOSCO Principles of High RegulatoryStandards and Mutual Cooperation and Assistance”IntroductionIn 1994, IOSCO issued a report on “Issues Raised for Securities and Futures Regulatorsby Under-Regulated and Uncooperative Jurisdictions” and a subsequent Resolution on“Commitment to Basic IOSCO Principles of High Regulatory Standards and MutualCooperation and Assistance”.The Resolution calls for each IOSCO member to renew from time to time “itscommitment to basic IOSCO principles contained in the By-Laws and in each subsequentResolution”. The Resolution also asks that each IOSCO member provide the name of acontact person to assist in the timely processing of all requests for assistance, andperiodically conduct a self-evaluation of the securities and futures laws and regulationsapplicable in its jurisdiction. The self-evaluation process contemplates, specifically, anexamination of the laws and regulations in a jurisdiction that:− require the maintenance of records concerning securities and futures trading, as well asbeneficial ownership and control of entities and bank / brokerage accounts;− impede the member, or other authority in its jurisdiction charged with theadministration or enforcement of securities and futures laws, from collecting relevantinformation or sharing it with foreign securities and futures authorities.To assist with the self-evaluation process, a detailed questionnaire was provided toIOSCO members.Responses have now been received from 83 jurisdictions, 7 remain outstanding (see listattached). Concerted efforts have been made to obtain self-evaluations from thenon-responding IOSCO members, and to obtain clarification of the responses as well asadditional information where needed.The self-evaluation exercise is useful on three levels. The exercise undoubtedlycontributes to improving international cooperation and enhancing IOSCO members’awareness of cooperation. More importantly, however, the self-evaluation processenables “IOSCO to monitor closely the ability of its members to obtain information from 2other jurisdictions, and take such steps as may be necessary and appropriate to address thesituation in the future”.1 The exercise also results in a comprehensive compendium ofinformation which will prove invaluable to IOSCO members. Overall, the self-evaluationprocess appears to be an appropriate method by which members can reaffirm theircommitment to IOSCO principles calling for continued progress toward high regulatorystandards and mutual cooperation.This report is divided into three parts:− the methodology adopted for reviewing and assessing the self-evaluations;− the results of the review and assessment;− recommendations.PART IMethodology Adopted for Reviewing the Self-Evaluations ConductedPursuant to the IOSCO Resolution on “Commitment to BasicIOSCO Principles of High Regulatory Standards and Mutual Cooperationand Assistance”The first objective in the review process was to draw the attention of all IOSCO membersto the importance of fully implementing the Resolution. Obtaining the highest number ofresponses to the questionnaire would ensure that the self-evaluations comprehensivelyreflect the prevailing situation in IOSCO member jurisdictions with regard to themaintenance, collection and cross-border exchange of information. This, in turn, wouldpermit wider reflection within IOSCO on the ways to improve and develop the level ofregulation and mutual cross-border assistance and cooperation.The second objective of the review process was to assess the self-evaluations in order todraw targeted conclusions regarding their substance. To this end, a thorough study ofeach self-evaluation was conducted by review teams consisting of volunteers from theWorking Parties on Enforcement and the Exchange of Information of the Technical andEmerging Markets Committees. The review teams sought to glean a clear and preciseview of the situation in each IOSCO member jurisdiction with respect to certain coreissues that have an impact on the ability of futures and securities authorities to administerand enforce securities and futures laws.The following core issues were identified: 1Cf. 1994 Resolution on “Commitmen