IOSCO found that the majority of the 36 participating jurisdictions have a client asset protection regime that meets most of the principles, with Europe and North America, in particular, having measures in place against all applicable principles.
IOSCO’s 2014 recommendations describe:
In summary, the eight principles cover:
Jurisdictions were asked to identify the published requirements (legislative, regulatory and policy measures) that implement (or were proposed to implement) the principles. Mere guidance was deemed insufficient.
IOSCO concluded that implementation progress varied by jurisdiction and by principle. In the EU, most jurisdictions reported having final adoption measures across all principles. Canada and the US had measures across all principles, with the exception of Principle 6, which is not applicable in those jurisdictions. In some other regions (e.g South America), implementation progress was less advanced. Also, progress varied across the principles. All bar one jurisdiction had implemented Principles 2, 7 and 8, whereas only 24 out of 36 jurisdictions had measures in place to meet Principle 3. Also, only two jurisdictions (Pakistan and Switzerland) reported that adoption measures were in progress (neither of which related to Principle 3). IOSCO gives no indication that it intends to undertake any further work at this stage.
Although good progress has been made, it is important that firms inform themselves of potential gaps in foreign regimes and take appropriate measures to mitigate potential risks to clients’ assets.