IOSCO/MR/05/ 2024
Madrid, 4 April 2024 – The International Organization for Securities Commissions (IOSCO) today published a Consultation Report on Evolution in the Operation, Governance and Business Models of Exchanges: Regulatory Implications and Good Practices.
The Consultation Report analyzes the structural and organizational changes within exchanges, focusing on business models and ownership structures. It highlights a shift towards more competitive, cross-border, and diversified operations as exchanges integrate into larger corporate groups.
Furthermore, the Consultation Report discusses regulatory considerations, particularly in the organization of individual exchanges and Exchange Groups1 and the supervision of Multinational Exchange Groups. It addresses potential conflicts of interest arising from matrix structures and the challenges of overseeing individual exchanges within Exchange Groups.
Additionally, it outlines a set of six good practices for regulators to consider in the supervision of exchanges, particularly when they provide multiple services and/or are part of an Exchange Group. The good practices are also complemented by a non-exclusive list of supervisory tools used by IOSCO jurisdictions to address the issues under discussion, in the form of “toolkits”.
While the Consultation Report focuses on equities listing trading venues, the findings are also relevant to other trading venues, including non-listing trading venues and derivatives trading venues.
Isadora Tarola, Chair of the IOSCO Committee on Regulation of Secondary Markets (Committee 2), said “In today’s rapidly evolving financial landscape, this consultation report sheds light on the shifts occurring within exchanges worldwide and offers six good practices as well as supervisory toolkits which aim to address the challenges and ensure effective oversight in this evolving environment.”
IOSCO is seeking input from market participants on the major trends and risks observed, and the proposed good practices. Comments on the consultation report should be sent to sd-markets-team@iosco.org on or before 03 July 2024.
- “Exchange Group” means a group of entities, including an exchange or exchanges, operating under common ownership or management. An Exchange Group may operate different exchanges or other trading venues for different types of financial instruments (such as stocks, bonds, futures, and options) and may operate different entities for other services (such as clearing, settlement, data, and technology).
