International securities regulator IOSCO has outlined nine policy recommendations aimed at addressing concerns related to market integrity and investor protection in the realm of decentralized finance (DeFi).
According to IOSCO, these recommendations are intended to promote greater consistency in regulatory frameworks and oversight for this emerging sector across member jurisdictions.
The recommendations focus on six key areas: understanding DeFi arrangements and structures; establishing common standards for regulatory outcomes; identifying and managing key risks; ensuring clear, accurate, and comprehensive disclosures; enforcing applicable laws; and fostering cross-border cooperation.
These DeFi recommendations complement previous guidelines for crypto and digital asset markets released last month.
Jean-Paul Servais, chair of IOSCO, emphasized, “The risks of crypto-asset markets are real, and we are tackling these in a coordinated manner. We seek consistent implementation of these IOSCO Recommendations across our membership to best protect investors globally.”