The International Organisation of Securities Commissions (Iosco) has released a consultation paper aimed at assessing the risks linked to the changing business models of stock exchanges and other market infrastructures.
According to Iosco, there is a noticeable shift towards more competitive and diversified operations, with exchanges increasingly resembling large corporations. This trend is evident not only in the acquisition of multiple national exchanges by a single group but also in the acquisition of data providers, digital asset platforms, and other related services.
Iosco has raised concerns regarding the regulatory and governance implications for multinational exchange groups. These concerns include potential conflicts of interest stemming from “matrix structures” and the complexities involved in supervising individual exchanges within larger exchange groups.
To address these issues, Iosco has put forward six recommendations for regulators. These recommendations focus on conflicts of interest, regulatory compliance, and the need for oversight of the structure and ownership of significant exchange groups.
“In today’s rapidly evolving financial landscape, this consultation report highlights the changes occurring within exchanges globally and offers six best practices along with supervisory toolkits designed to tackle challenges and ensure effective oversight in this dynamic environment,” stated Isadora Tarola, chair of the Iosco committee on the regulation of secondary markets.
Market participants are encouraged to submit their comments on the consultation paper by July 3.