IOSCO Report Compares and Analyzes Prudential Standards in the Securities Sector (with Lofchie Comment)
IOSCO published a consultation report titled "A Comparison and Analysis of Prudential Standards in the Securities Sector," which contains a comparative analysis of the key prudential/capital frameworks for securities firms.
The two primary goals of the report were (i) to undertake a high-level comparative analysis of the key prudential/capital frameworks for securities firms for the purposes of highlighting similarities, differences and gaps; and (ii) to reach conclusions about key themes and issues identified in the comparative analysis and to use them to perform a high-level conceptual framework analysis of the 1989 IOSCO report titled "Capital Adequacy Standards for Securities Firms" ("1989 Report").
Many of the key themes identified in the 1989 Report are already reflected in the existing IOSCO capital adequacy standards report, such as the need for minimum capital requirements that reflect the type of business being conducted by securities firms and for risk-based capital requirements. Additionally, the report includes three questions on which IOSCO is seeking comments before June 10, 2014:
- Does the report cover all of the key issues on prudential standards in the securities sector? If the answer is no, please explain what other issues should be covered.
- A primary aim of this report was to undertake a comparative analysis of the key prudential/capital standards for securities firms. Does the report identify and analyze the main similarities, differences and gaps between different prudential frameworks?
- In light of the findings in this report, which areas of the 1989 document, if any, do you believe should be updated and/or amended?
Lofchie Comment: The value in the comparisons of national capital regimes is not so clear since firms in different regions hold different positions and have different exposures.
See: A Comparison and Analysis of Prudential Standards in the Securities Sector; Press Release.