Events that contributed to the global financial crisis have led to careful examination of how securities firms protect their clients’ assets.
To help regulators improve supervision of such firms, the International Organization of Securities Commissions (IOSCO) published a consultation report, Recommendations Regarding the Protection of Client Assets.
The report, available at tinyurl.com/bntsbyw, describes eight principles to clarify the roles of regulated securities firms—called “intermediaries” in the report—and regulators in protecting clients’ assets.
Although laws to protect investing clients vary across
jurisdictions, the report describes the basic responsibilities of
intermediaries and regulators. Intermediaries placing client assets
with third parties should reconcile the clients’ accounts and records
with those of the third party, while regulators must maintain
effective safeguarding of clients’ assets, according to the report.
