IOSCO Publishes Analysis of Potential of Tech-Driven Change in Securities Market Industry

March 2017

The International Organization of Securities Commissions (IOSCO) has published the report, IOSCO Research Report on Financial Technology (Report), which highlights the intersection between financial technology (Fintech) and securities market regulation. The Report describes the impact this intersection has on investors and financial services.

The Report discusses a number of innovative business models and emerging technologies that are transforming the financial services industry and analyses both the opportunities and risks that these new technologies present to investors, securities markets and their regulators. These new technologies include:

  • Financing platforms, specifically peer-to-peer lending and equity crowdfunding 
  • Retail trading and investment platforms, including robo-advisers and social trading
  • Institutional trading platforms, particularly innovation in bond trading platforms
  • Distributed ledger technologies, including application of the blockchain technology and shared ledgers to the securities markets.

The Report also discusses key trends adding to change in the financial services industry, including the greater availability of data, exponential growth in computing power, and demographic and generational changes. IOSCO notes that these trends spur securities regulators to adopt pro-active measures to keep pace with technological innovation and tap its potential for rendering the financial system more inclusive, efficient and resilient.

While regulators are adopting measures to keep pace with innovation, there are challenges. Tech firms operate globally, although regulation is conducted more locally, within national or sub-national borders, which can result in regulatory inconsistency across borders. IOSCO recommends that regulators address these challenges through international co-operation and information exchange.

The Report is available on this link.

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