International securities regulator Iosco has set out nine policy recommendations designed to address market integrity and investor protection concerns connected to decentralised finance (DeFi).
Iosco says that its recommendations should support greater consistency of regulatory frameworks and oversight for the nascent sector in member jurisdictions.
They cover six areas: understanding DeFi arrangements and structures; achieving common standards of regulatory outcomes; identification and management of key risks; clear, accurate and comprehensive disclosures; enforcement of applicable laws; and cross-border cooperation.
The DeFi recommendations compliment others for crypto and digital asset markets issued last month.
Jean-Paul Servais, chair, Iosco, says: “The risks of crypto-asset markets are real and we are tackling these in a coordinated manner, seeking consistent implementation of these Iosco Recommendations across our membership to best protect investors globally.”
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