On November 2, 2011 the Financial Stability Board (“FSB”) reported on how global member and nonmember organizations performed on their objectives for information exchange; and cooperation standards in the areas of banking supervision, insurance supervision, and securities regulation. Our report is mainly on the securities regulation initiative. The United States members of the FSB are: the SEC; the Department of Treasury, and the Board of Governors of the Federal Reserve System.
In March 2010, the FSB was directed by the G20 Leaders to develop a “toolbox of measures” to promote adherence to common standards and international information exchange cooperation. The G20 was established in 1999, in the wake of the 1997 Asian Financial Crisis, to bring together major advanced and emerging economies to stabilize the global financial market. Since its inception, the G20 has held annual Finance Ministers and Central Bank Governors’ Meetings and discussed measures to promote the financial stability of the world and to achieve a sustainable economic growth and development.
The securities regulations principles tested were formulated by the International Organizations of Securities Commission (“IOSCO”). The FSB tested the following principles; enforcement of securities regulations (Principles 8, 9, 10) and cooperation in regulation (Principles 11, 12, 13):
Principle No. 8: the regulator should have comprehensive inspection, investigation and surveillance powers.
Principle No. 9: the regulator should have comprehensive enforcement powers.
Principle No. 10: the regulatory system should ensure an effective and credible use of inspection, investigation, surveillance and enforcement powers and implementation of an effective compliance program.
Principle No. 11: regulators should have authority to share both public and non public information with domestic and foreign counterparts.
Principle No. 12: regulators should establish information sharing mechanisms which ensure how and when they will share both public and non public information with their domestic and foreign counterparts.
Principle No. 13: regulatory system should allow for assistance to be provided to foreign regulators who need to make inquiries in the discharge of their functions and exercise of their powers.
Jurisdictions demonstrating sufficiently strong adherence
The following jurisdictions were assessed in their most recent IMF-World Bank detailed assessment reports as compliant or largely compliant with all, or all except one, of the relevant cooperation and information exchange standards. Therefore, these jurisdictions demonstrate sufficiently strong adherence to those standards. The IMF-World Bank assessments were conducted against the versions of the standards and assessment methodologies in force at the time of the assessments. Consequently, in some cases, older versions of these standards and methodologies were used. These assessments will
be updated by the IMF and World Bank over time.
||Isle of Man
|British Virgin Islands
||Hong Kong SAR
* FSB member jurisdictions are indicated in bold.
Jurisdictions taking the actions recommended by the FSB and/or making material progress towards demonstrating sufficiently strong adherence
Some of the following jurisdictions are in the process of implementing reforms to
strengthen their adherence. Others have old assessments that indicated weaknesses in international cooperation and information exchange, or have never been assessed, and have requested new assessments by the IMF and World Bank. The FSB is working with several authorities to develop a plan for implementing the actions recommended by the IMF-World Bank team in the latest detailed assessment report.
evaluation team indialogue (and, where indicated, ROSC underway or requested)#
||ROSC requested or planned
|Argentina not previously assessed
|China not previously assessed
||Russia’ (banking, insurance, securities)
|Czech Republic (banking)
|India insurance not previously assessed
||not previously assessed
Indonesia not previously assessed
Saudi Arabia insurance not previously assessed
Areas of weakness identified in previous IMF-World Bank assessments are
indicated in parentheses. Banking = BCBS Core Principles for Effective Banking Supervision (principles 3, 21, 24, and/or 25 of the 2006 version); insurance = IAIS Insurance Core Principles (principles 5, 6, 7 and/or 17 of the 2003 version); securities = 1OSCO Objectives and Principles of Securities Regulation (principles 8, 9, 10, 11, 12 and/or 13 of the 1998 version).
* FSB member jurisdictions are indicated in bold. # indicates those jurisdictions where IMF-World Bank Report on the Observance of Standards and Codes (“ROSC”) have been recently completed and for which a copy of the detailed assessment reports is not yet available to the FSB. + indicates those jurisdictions where ROSC is underway or requested.
The FSB has determined the following jurisdictions to be non-cooperative. Jurisdictions are identified as non-cooperative if they are participating in the FSB’s evaluation process but showing insufficient progress to address weak compliance; not cooperating satisfactorily with the FSB’s process for strengthening adherence (for example, declining to share with the FSB the latest IMF-World Bank detailed assessment reports on the observance of the relevant standards); or not engaged in dialogue with the FSB. The FSB continues to work with these jurisdictions to encourage their adherence to regulatory and supervisory standards on international cooperation and information exchange.
Participating in the evaluation
process but showing insufficient progress to address weak compliance
no jurisdictions at present
cooperating satisfactorily with the FSB’s process for strengthening adherence
no jurisdictions at present
Not engaged in dialogue with the FSB
Libya (former regime) never assessed by IMF-World Bank Venezuela never assessed by IMF-World Bank. The determination of Libya as a non-cooperative jurisdiction was made on the basis of the failure of the former regime to enter into dialogue. The FSB will seek a dialogue with the new authorities, which could lead the FSB to
re-evaluate Libya and move it to another category.