Global markets watchdog proposes closer scrutiny of stock exchanges

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The International Organization of Securities Commissions (IOSCO) suggested new guidelines on Thursday to help regulators keep a closer eye on stock exchanges and their changing business practices. Over the last twenty years, many exchanges have become publicly listed companies while still having some self-regulatory powers. IOSCO warned that this shift could create conflicts of interest and operational challenges.

One concern highlighted by IOSCO is the practice of “dual-hatting,” where directors serve on multiple boards within exchange groups to save money and simplify operations. However, this could lead to conflicts of interest, especially when different boards or shareholders have competing interests. To address these issues, IOSCO proposed six “good practices” for regulators to ensure that exchanges maintain their independence in fulfilling their regulatory duties.

Additionally, IOSCO emphasized the importance of regulators closely monitoring multinational exchange groups operating within their jurisdiction. By doing so, regulators can ensure that each individual exchange within a group maintains proper controls and meets regulatory standards.

Source: Reuters

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