To better coordinate financial regulation and deal with volatile
markets effectively, securities regulators from across the globe formed
three task forces to target short selling, hedge funds and unregulated
financial trading, Securities and Exchange Commission Chairman
Christopher Cox
announced late Monday.
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The International Organization of Securities Commissions, or IOSCO, Technical Committee was convened by teleconference Monday. "To be effective, the regulation of trading abuses must be coordinated across major markets," Cox said in a statement. "The three task forces the Technical Committee is forming on each of these topics will help ensure that global capital markets address the current turmoil on a sound basis and in a well-coordinated way."
The newly formed short-selling task force will be chaired by the Securities and Futures Commission of Hong Kong and will work to eliminate different approaches to "naked" short sales, including delivery requirements and disclosure of short positions, while minimizing any harm to legitimate securities lending, hedging and other transactions.
Australian and French securities regulators will chair a second task force that will focus on ways to increase oversight of and information about unregulated financial markets and products, including derivatives that trade over-the-counter. The third task force, co-chaired by British and Italian financial regulators, will examine ways to minimize risks associated with hedge funds.
The task forces will present their reports at the next Technical Committee meeting in February 2009 and to the next G-20 summit in spring 2009.
- Donna Block
Donna Block is one of The Deal's senior Wall Street reporters.
