IOSCO urges subprime lending disclosures

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09 Feb 2008

The Technical Committee of the International Organization of Securities Commissions (IOSCO) has identified four key steps that can be taken by market participants to help restore confidence in the operation of the market that has been shaken by the subprime lending crisis.

Three of the four steps involve enhanced disclosures. Click to Download the IOSCO Technical Committee Statement (PDF 29k). Here are the four key steps in the IOSCO Statement:

Key steps that can be taken by market participants to help restore confidence in the operation of the market:

  1. Financial institutions are encouraged to enhance the information available to the primary market for structured finance instruments.
  2. Market participants should cooperate to identify information that would be relevant and useful in achieving an appropriate level of transparency in the secondary market.
  3. Financial institutions should make accurate and complete disclosure of the size and the level of their exposures related to structured finance to the market.
  4. Institutional investors and asset managers are encouraged to develop and undertake strict due diligence processes in their assessment prior to any investment into complex structured products.

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