Market Integrity
Market integrity is a cornerstone of a stable and trustworthy global financial system. It encompasses fairness, transparency, and ethical conduct in the operations of financial markets. Globally, the International Organization of Securities Commissions (IOSCO), which is the leading standard-setter in the field of securities regulation, issued 38 core principles offering a comprehensive framework for maintaining market integrity, investor protection, and systemic risk mitigation.
IOSCO’s overarching strategy to ensure market integrity relies on several key pillars: real-time monitoring, global harmonization of regulations, risk-based supervision, and strong enforcement mechanisms. This strategy not only deters misconduct but also builds public trust in capital markets, ensuring they can effectively mobilize capital and allocate resources in the economy.
For the IFSCA, IOSCO’s principles serve as a guiding framework in shaping its regulatory ecosystem for India’s IFSCs. IFSCA has taken significant steps to align with these global standards. Through its regulatory approach, IFSCA has implemented robust risk-based supervision, enforced disclosure requirements, and laid down frameworks for AML/CFT compliance. It also promotes fair access to trading infrastructure and encourages financial entities to adopt ethical practices. IFSCA’s circulars and guidelines—for instance, those on liquidity risk management, corporate governance, and cybersecurity—reflect a strong commitment to upholding market integrity in line with IOSCO’s principles.
The Bank for International Settlements (BIS) plays a pivotal role in promoting market integrity by providing guidance, setting global standards, and fostering coordination among financial regulators and central banks. A critical pillar of BIS’s approach to market integrity is the promotion of sound market practices and governance. BIS emphasizes that financial institutions must operate within strong governance frameworks that support ethical conduct and responsible decision-making. By implementing BIS-aligned governance, risk, and compliance standards, IFSCA ensures that IFSC entities uphold high levels of transparency, accountability, and ethical conduct. Moreover, by encouraging institutions to adopt the Global FX Code and Basel capital standards, IFSCA strengthens both investor protection and the competitive positioning of India’s IFSCs on the global financial map.
