Filed Under:Your Practice, Practice Management

IOSCO report details suitability principals

Intermediaries should be required to adopt and apply appropriate policies and procedures to distinguish between retail and non-retail customers when distributing complex financial products, according to a new report.

This requirement is one of nine suitability principals outlined in a final, January 2013 report of the board of the International Organization of Securities Commissions, headquartered in Madrid, Spain. The report details IOSCO principals on suitability requirements with respect to the distribution of complex financial products. (i.e., standards for intermediaries to assess whether a particular product matches the investment knowledge, experience, objectives and risk tolerance of a customer).

Principle 9: Regulators should supervise and examine intermediaries on a regular and ongoing basis to help ensure firm compliance with suitability and other customer protection requirements relating to the distribution of complex financial products. The competent authority should take enforcement actions, as appropriate. Regulators should consider the value of making enforcement actions public in order to protect customers and enhance market integrity.

 

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Nichole Morford

Nichole Morford
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