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Global regulators’ body lauds Sebi’s vigil on cross-border misconduct

Indian capital market watchdog Sebi has been appreciated by global regulators' body IOSCO for early implementation of effective measures to curb misconduct in cross-border financial services activities.

International Organisation of Securities Commissions (IOSCO), a grouping of capital market watchdogs regulating over 95 per cent of the world's securities market, has passed a resolution asking its members to put in place proper checks for cross-border misconduct in their respective jurisdictions.

While passing the resolution at its five-day annual conference ending on Thursday at Luxembourg, IOSCO said the Securities and Exchange Board of India (Sebi) and Hong Kong's regulator have already adopted strong measures in this regard.
IOSCO is also adopting measures to encourage non-signatory members to sign its Multilateral Memorandum of Understanding (MMoU) on co-operation and information exchange.

This mechanism is being used by securities regulators to fight the cross-border financial services misconduct that can weaken global markets and undermine investor confidence.

The new resolution will require members to take extra precautions when exercising their authorisation or supervisory and enforcement responsibilities in respect of entities or individuals linked to non-signatory jurisdictions.

Noting that some members have already taken measures in this regard, IOSCO said: ‘India requires foreign investors in Indian mutual funds and equity shares to fulfil criteria, including being resident in a country that is a signatory to IOSCO's MMoU or a signatory of a bilateral MoU with Sebi’.

About Hong Kong, IOSCO said the country expects an overseas company seeking a listing on the local exchange to be incorporated in a jurisdiction where arrangements are in place to ensure reasonable regulatory cooperation.
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