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Assessment Committee

What is AC and what does it do?

The AC has been established to drive IOSCO's key strategic goal of being the recognised standard setter for securities regulation. IOSCO's effectiveness in achieving this goal will be reflected in implementation by members of IOSCO's Objectives and Principles of Securities Regulation ('IOSCO Principles') (which it will ensure remain contemporary); and other standards and policies set out in IOSCO reports or resolutions approved by IOSCO ('IOSCO Standards').

The AC was established in February 2012 by the Executive Committee ('EC') as an initiative of IOSCO's Strategic Direction Review. The Strategic Direction Review had recommended that the AC be established to organise and structure a program to assess implementation of IOSCO Principles and Standards across the IOSCO membership. It also provided guidance on how the assessment program may be structured.

Assessment Committee Mandate

Objectives

The AC is responsible for developing and delivering programs to identify and assess implementation of IOSCO's Objectives and Principles of Securities Regulation ('IOSCO Principles') and other standards and policies set out in IOSCO reports or resolutions approved by IOSCO ('IOSCO Standards') across the IOSCO membership.

The objective of these programs is to encourage full, effective and consistent implementation of Principles and Standards across IOSCO membership which will - in turn - contribute to:

• Investor protection, fair and efficient markets and reducing systemic risk globally;
• Reducing opportunities for regulatory arbitrage;
• Reducing the costs of conducting business across borders; and
• Improving regulatory capability.

Activities

The three main activities of the Assessment Committee are:

1. The conduct of Country Reviews (for jurisdictions whose regulation of securities is not part of the IMF or World Bank FSAP programs). These Reviews will involve reviewing Self Assessments prepared by IOSCO Members about the implementation of IOSCO Principles. The aim of these Reviews will be to evaluate the status of implementation of IOSCO's Principles and to recommend a road map to address any gaps in implementation;
2. The conduct of Thematic Reviews of particular IOSCO Principles and IOSCO Standards across IOSCO's membership. The aim of these Reviews will be to provide a snap shot of implementation of IOSCO's Principles and Standards. This snapshot will assist in identifying gaps in implementation, differences in approach to implementation, examples of good practice and difficulties and issues experienced in implementation. If appropriate, Reviews will address identified gaps in implementation; and
3. Maintenance of the IOSCO Principles and Methodology. This work involves supporting users of the Methodology, updating the Methodology and assessing the need to update the IOSCO Principles.

The AC's core responsibility is the conduct of Country Reviews and Thematic Reviews (collectively known as 'Reviews'). This responsibility is distinct from the administration and provision of technical assistance, which will remain the responsibility of the IOSCO Secretariat. The AC will work closely with the IOSCO Secretariat to ensure technical assistance is provided where appropriate to members to support participation and implementation of Review recommendations.

Benefits of Participation in AC's Programs

The benefits of Country Reviews

Country Reviews offer the following benefits to participating authorities:

• They provide an independent and objective evaluation of the status of implementation of the IOSCO Principles by the authority and the progress they may have made against previous assessments;
• They offer a road map to address any issues of significance which may be material to authorities' needs; and
• Their findings support any calls for legislative/policy and regulatory changes the Review might identify.

Participating authorities also benefit from close liaison with the AC and benefit from the expertise and experience of its members.

More generally, we see the program of Country Reviews as encouraging full, effective and consistent implementation of IOSCO Principles and Standards across IOSCO's membership.

Benefits of Thematic Reviews

The thematic review program is intended to:

• Provide a stimulus to members who have not implemented guidance to take steps to implement them;
• Provide a stimulus to understand the significance of any identified differences in approach and measures which may be developed to work with those differences;
• Identify examples of best (or good) practice in implementing the IOSCO Principles and Standards to assist other IOSCO members in implementation; and
• Identify areas in which IOSCO Principles and Standards may warrant revision or where further IOSCO work would be necessary (through the SCs and TFs).

Scope of AC's Programs

Thematic Review: The AC will develop the scope of the review.

Country Review: The country would be consulted on the scope and Terms of Reference of the review. The scope of Country Reviews may be either the all IOSCO Principles or limiting the Review to particular sub-sets of the Principles relevant to the Country.

Technical Assistance for AC's Program

Country Review: The IOSCO Secretariat will be responsible for administration and provision of technical assistance at any stage during the country review. The AC will work closely with the IOSCO Secretariat to ensure technical assistance is provided where appropriate to members to support their participation in the CR program.

Processes

Thematic Review:

1. Reviews will be conducted by Review Teams ('RTs') that will be formed for each Review. RT members are selected according to their expertise in the subject matter of the Review or their experience in undertaking IOSCO assessments.
2. Reviews will be desk-based using responses provided to surveys designed and developed by the RT. The Review may involve more detailed discussions between the RT and respondents about their responses where appropriate, with a view to enhancing the quality of analysis.
3. Reviews will involve the following steps:
   • The Chair and Vice-Chair will establish the RT and appoint the Leader
   • A survey about implementation ('survey') will always be the starting point for the Thematic Review. The survey will be about implementation of IOSCO Principles or Standards. The survey will, in the first instance, be drafted by the RT.
   • The survey would clearly set out the scope and purpose of the survey. Survey contents will vary according to the subject matter of the Review.
   • The participants will be given a reasonable time frame within which to respond to the survey.
   • There might be a need to collect confidential information in the framework of certain reviews. In such cases, the AC and RT members, as appropriate, will be subject to confidentiality requirements. In these cases, there may be a need to prepare a public version of the report not containing any confidential information.
   • The RT will analyse survey responses.
   • The AC will then review and comment on the Report.
   • The AC will submit an agreed Report to the IOSCO Board (or a sub-Committee appointed by the IOSCO Board) for approval.
   • The AC should in all cases publish the outcomes of its Thematic Review.

Thematic Reviews Process Document

Country Review:

Step 1	Once the scope is agreed the first step is the preparation by the member jurisdiction (country) of a self assessment of implementation of the relevant IOSCO Principles. The AC would assess the need for Technical Assistance that the jurisdiction may need in preparing the self assessment and would the AC would coordinate for TA with the IOSCO General Secretariat.
Step 2	The AC then appoints a team to review the self assessment. The Review Team comprises subject matter experts in various aspects of the IOSCO Principles.
Step 3	The Review Team then conducts a desk-based review of the country's self-assessment. During this step the country may be asked to clarify the information provided in the Self Assessment and to provide relevant data, copies of laws, regulations and supervisory guidance, and other relevant written material.
Step 4	An onsite visit may be required for the Review Team to gain further insights into the country's self assessment and its desk based review.
Step 5	The Review Team, in consultation with the Coordination Team (CT) within the IOSCO Secretariat and the country, then prepares a draft assessment report setting out the status of implementation and a recommended road map on how issues of significance and materiality to the IOSCOs Principles identified by the Country Review might be addressed. The Report will be reviewed by the AC. The representatives of the country will be invited to participate in the AC meeting discussions to offer its views on the Report.
Step 6	The Final Report (including the Road Map) will then be submitted to the IOSCO Board for endorsement and approval to publication.

The review process would take between 6 and 12 months.

Evaluations

Thematic Review: The Terms of Reference developed by AC would clarify on the evaluation process in the review.

For example: The TOR for the first thematic review on "Implementation of IOSCO Principles 6 and 7" clearly sets out that the Review is not intended to be a benchmarking exercise. The Review will be an opportunity for IOSCO and members participating in the Review to show progress in implementing these Principles, share experiences of other members' jurisdictions in implementation and identify and assess whether further guidance is needed from IOSCO to support implementation.

Country Reviews: The Country review aims to:

• Evaluate the status of compliance of IOSCO Principles by the Country;
• Identify gaps in the implementation of IOSCO Principles; and
• Recommend, through a road map, how issues of significance and materiality to IOSCO Principles identified by the review might be addressed.

Road Maps

The AC will deliver high quality and constructive reviews of implementation of IOSCO Principles and Standards. Reviews will provide road maps setting out how issues of significance and materiality identified in the Review might be addressed.

For the country reviews, the AC will develop a recommended road map setting out areas for improvements and how those improvements might be achieved. These will be in relation to Principles where the Country has not received a 'sufficient progress made' rating or where it has not been assessed as 'Fully Implemented'. The Road Map will place emphasis on those improvements that are most material in terms of IOSCO Principles and the needs and circumstances of the Country.