International Organization of Securities Commissions: Report on the Distribution of Complex Financial Products

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On January 21, the International Organization of Securities Commissions (IOSCO) published its final report on the suitability requirements for the distribution by intermediaries of complex financial products to both retail and non-retail customers. The report seeks to promote consumer protection and sets out nine principles to be applied by policy makers at a national level in accordance with the particular types of customers in their jurisdiction. Rather than giving a precise list of what the IOSCO considers to be complex financial products, the report instead provides criteria by which such products can be determined and identified.

The nine principles at the core of the report concern the following areas: enforcement, incentives, customer classification, overarching duties to all customers (regardless of classification), customer protection for non-advisory services, suitability protection for advisory services, compliance and disclosure.

 


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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