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To deter misconduct by entities in securities markets worldwide, the International Organisation of Securities Commissions (IOSCO) has mooted cooperation and collaboration among regulators to eliminate safe havens and work together. SEBI is one of the 34 regulators which constitute the IOSCO Board.
In a report on credible deterrence in the enforcement of securities regulation IOSCO said, “Potential wrongdoers may be deterred from engaging in misconduct when they know that securities regulators are working with criminal authorities and other domestic, national and international agencies to strengthen their detection, investigation, prosecution and sanctioning capabilities and when they understand they cannot hide behind borders because cross-border regulatory counterparts are working together to ensure violators have no safe haven.”
In addition to this, IOSCO outlined six other elements for credible deterrence.
These are legal certainty; detecting; investigation and prosecution of misconduct; sanctions; public messaging and regulatory governance. The policy forum for securities regulators and the global standard-setter observed, “Misconduct in securities and investment markets has profound and far-reaching consequences for all levels of society. Consumers, investors, capital markets, institutions, national economies and global financial systems are all impacted when the integrity of securities and investment markets are undermined by misconduct.”
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