On 17 January 2022, the International Organization of Securities Commissions (IOSCO) published a consultation report intended to assist its members in adapting their regulatory and enforcement approaches to meet the challenges posed by recent technological developments and the rapid growth in digitalisation and use of social media which is changing the way financial products are marketed and distributed.
The consultation report analyses developments in online marketing and distribution of financial services and products to retail investors in IOSCO member jurisdictions, both domestically and on a cross-border basis. It presents proposed toolkits of policy and enforcement measures. The policy and enforcement toolkits include seven and five measures, respectively, that would help in addressing the issues and risks associated with online marketing and distribution.
The proposed policy toolkit measures relate to:
- Firm level rules for online marketing and distribution.
- Firm level rules for online onboarding.
- Responsibility for online marketing.
- Capacity for surveillance and supervision of online marketing and distribution.
- Staff qualification and/or licensing requirements for online marketing.
- Ensuring compliance with third country regulations.
- Clarity about legal entities using internet domains.
The proposed enforcement toolkit measures relate to:
- Proactive technology-based detection and investigatory techniques.
- Powers to promptly take action where websites are used to conduct illegal securities and derivatives activity and other powers effective in curbing online misconduct.
- Increasing efficient international cooperation and liaising with criminal authorities and other local and foreign partners.
- Promoting enhanced understanding by and collaboration with providers of electronic intermediary services with regard to digital illegal activities.
- Additional efforts to address regulatory and supervisory arbitrage.
The deadline for comments on the consultation report is 17 March 2022.