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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 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
2. The conduct of IOSCO Standards Implementation Monitoring (ISIM) Reviews. The AC developed the ISIM program to complement its ongoing workstreams as a useful, less resource intensive, mechanism for monitoring implementation progress for a set of IOSCO Principles across IOSCO members. The aim of ISIM is to provide an overview of implementation, identify gaps, trends and good practices and targeted recommendations.
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. This may also involve programs to make the Methodology more accessible and user-friendly for members.

The AC's core responsibility is the conduct of ISIM 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

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).

The benefits of ISIM Reviews

The ISIM program enables IOSCO to present a global overview of implementation of a set of Principles by member jurisdictions and gather useful feedback on the subject. In contrast to country reviews, the ISIM exercise aims to be less resource intensive and typically covers a larger population of member countries. The ISIM Review presents an opportunity to both developed and emerging market jurisdictions to participate in an implementation monitoring exercise.

Other benefits of ISIM include:

1. The reporting process through the ISIM exercise incentivizes jurisdictions to reflect and consider the extent of their implementation efforts under the relevant IOSCO Principles and encourages greater consistency;
2. The ISIM Review analyses the similarities and differences in implementation by the various jurisdictions and identifies good practices, which will be useful in future policy, capacity building and technical assistance work;
3. The ISIM Review allows the AC to cover a large number of members and their status against a number of Principles, all based on the application of the IOSCO Methodology. It differs from a full-fledged Country Review as it focuses on one area of the securities regulatory regime provided by each of the 10 categories under the Methodology.
4. This program covers a large number of jurisdictions including Growth and Emerging Market (GEM) jurisdictions and therefore balances IOSCO's monitoring efforts in terms of its coverage of jurisdictions.

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

ISIM Review:

The ISIM Review has the same preparatory processes as a thematic review such as preparation of project specifications and formation of a review team. In terms of execution, the ISIM Review has the following distinctive features –

• In conducting the ISIM, the AC will be using the revised Methodology for Assessing Implementation of the IOSCO Objectives and Principles of Securities Regulation (Methodology) which has been approved by the President's Committee at the IOSCO Annual Conference in May 2017, for the Assessment Methodology and Questionnaire - The Methodology has the Key Issues and Key Questions for assessing the implementation of the IOSCO Principles. The questionnaire would be designed to follow the relevant Key Questions from the Methodology;
• The ISIM Review is desk-based based using responses provided by the participating member jurisdictions.
• The final report will not contain any ratings. Instead, the deliverables will include –
  • the main findings on the status of implementation of the set of Principles being assessed;
  • any identified gaps in implementation;
  • any identified good practices in implementation;
  • any area which might be useful for IOSCO for future policy work, capacity building or technical assistance;
  • targeted recommendations for individual jurisdictions.

Recommendations

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