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High Level Questionnaire

Survey on the Implementation

of the

IOSCO Objectives and Principles

of Securities Regulation

Purpose of this Survey

At its 1998 Annual Conference, the International Organization of Securities Commissions(IOSCO) adopted the Objectives and Principles of Securities Regulation, setting forth 30

core principles of securities regulation.1 As the global forum for securities regulators,IOSCO is committed to establishing and maintaining consistently high standards for thesecurities industry.

2The principles are based on three fundamental objectives of securities

regulation:

the protection of investors3;

ensuring that markets are fair, efficient and transparent; and

the reduction of systemic risk.

The 30 core principles give practical effect to these three objectives. Together, the

Objectives and Principles are intended to give guidance to regulators and serve as ayardstick against which to measure progress toward effective regulation.

4

1IOSCO members expressed their commitment to the objectives and principles set out in the document by

agreeing to use their best efforts within each of their jurisdictions to ensure adherence to the principles.

This commitment extended to seeking changes to legislation, policy or regulatory arrangements that may

impede adherence to the principles.

2 For convenience, the word securities is used in this document, where the context permits, to refer to the

various market sectors. In particular, where the context permits, the word securities should be

understood to include reference to derivatives. The same applies to the use of the words securities

regulation, securities industry and securities markets.

3 The term investor is intended to include customers or other consumers of financial services.

4The particular manner in which a jurisdiction implements the objectives and principles described in this

document must have regard to the entire domestic context, including the relevant legal and commercial

framework. Moreover, the markets themselves are in a constant state of development, requiring the

content of regulation to change if it is to facilitate and properly regulate the changing markets.

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The purpose of this survey is to provide a tool for evaluating the extent to which a jurisdictions securities regulatory system currently is consistent with the Objectives andPrinciplesand for identifying areas in which more progress may be made.

All IOSCO members have been asked to complete the survey to help IOSCO gain a betterunderstanding of the extent to which and the means by which the securities regulatory

system in each member jurisdiction is consistent with the Objectives and Principlesand toidentify areas in which more progress may be made. IOSCO recognizes that the meansof implementation will vary across jurisdictions. The survey questions are designed toelicit an explanation of how the principles are being implemented, not to imply that aparticular method of implementation is mandated by the Objectives and Principlesdocument. IOSCO anticipates that it will update the survey on a regular basis to help trackits members continuing progress in meeting the Objectives and Principles.

It is also intended that there should be other more detailed surveys directed toimplementation of particular principles.

The results of the survey and the developments in regulatory and supervisory standards

may lead to additions and revisions and there may be a need to update the Objectives andPrinciplesperiodically.

Completing the Survey

Please indicate on the first page of your response the name(s) of the regulator(s)responsible for completing the survey in your jurisdiction and the names of otherregulators or responsible authorities that have contributed to the preparation of theresponse. Please include the name(s) of person(s) who may be contacted for follow-upquestions.

All members of IOSCO have been asked to complete the survey. The following are some

guidelines to help you complete the survey.

The survey will be most useful if you answer as candidly and completely aspossible, to give a clear picture of securities regulation in your country. IOSCOanticipates that it will update the survey on a regular basis, to help track IOSCOmembers continuing progress in meeting the Objectives and Principles. You areencouraged to provide sufficient detail to ensure an adequate explanation of howyour particular regulatory system is consistent with the objectives and principles.Please note that effective implementation may be evidenced by either a positive(yes) or negative (no) response to the survey questions, depending on thewording of a particular question. If a particular Objective or Principle does not applyto your jurisdiction, then you should explain how your jurisdiction addresses the

subject matter of that Objective or Principle.

Each principle is followed by a series of questions that highlight specificcomponents of a securities regulatory system that would help implement thatprinciple. In your responses, you should indicate whether those componentscurrently are part of your regulatory system or are under consideration. If they arebeing considered, please indicate your timetable or explain the steps being takento develop those components. Most questions call for a yes or no answer, but

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you are encouraged to explain your answers in more detail and to includecommentary on your future plans. If your answer indicates partial implementationof a Principle, you should, in describing the present position, consider whether itwould assist a reader to have information in respect of any additional topics raisedunder the "not implemented" heading.

In some areas, the Objectives and Principlesmay be satisfied by one of a varietyof regulatory approaches and you are particularly encouraged to provide additionalinformation to ensure an adequate explanation of how your regulatory systemsatisfies those Objectives and Principles. The securities markets are changingrapidly, including as a result of the impact of new technology. In preparing youranswers you should give careful consideration to the adequacy of the existingregulatory arrangements in the light of those changes in the market.

The first part of the survey asks you to identify all the entities that play a role insecurities regulation in your country. In many jurisdictions, the responsibility forsecurities regulation is shared by more than one organization. For example,responsibility may be shared among a securities commission, a body administering

company law; a stock exchange, a takeovers panel, and an entity regulatingbrokers. When you respond to the survey, your answers should not only reflectyour organizations structure and operations, but also those of other entities in your

jurisdiction that perform a function relevant to the matters addressed in theObjectives and Principles. When the questions use the term securities regulatorthey are referring to all of the entities that perform this function in your country.Each of your answers should identify which entity or entities you are referring to inthat answer.

Your survey responses should be divided into sections so it is clear to whichprinciple they relate. The response to each question, or group of related questions,should be numbered to correspond to the number of the question you are

answering.

The full text of the Objectives and Principles is available on the IOSCO InternetHomepage, at www.iosco.org. In completing the survey, you will need to refer tothe full text of the Objectives and Principlesand to relevant reports published byIOSCO, which are referenced in the footnotes to the Objectives and Principles.These documents provide solid guidance for answering the survey.

Here are some sample questions and three different sample answers to illustrate the levelof detail that you should provide in responding to the survey.

Principle 2: The regulator should be operationally independent and accountable in the

exercise of its functions and powers

2.1 Implemented

2.2 Partially Implemented

1. Please describe what has been done with regard to implementation and whatremains to be done.

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A Financial Services Reform Act is being tabled in Parliament. Its approval wouldrender the Commission operationally independent from external political andcommercial interference.

2. Please describe the major impediments that exist with regard to implementation.

Are there areas in which you would welcome assistance in order to achieve fullimplementation?

Impediments should disappear with the legislative change proposed. We wouldwelcome assistance in designing effective accountability frameworks.

3. Please describe your current plans for implementation and the timetable for givingeffect to those plans.

As soon as the Act is passed, we envisage a 4 year implementation period. This willinclude the review of our structure, operational framework and initial adjustments toregulation (see attached table).

2.3 Not implemented:

1. What steps are you taking to ensure that implementation efforts are initiated in thenear future:

We are urging our government to draft a Financial Services Reform Act in order tooverhaul the Financial System.

2. Please describe the major impediments that exist with regard to implementation.Are there areas in which you would welcome assistance in order to achieve full

implementation?

The major impediment is the lack of a suitable legal framework. We would welcomeassistance in drafting a Financial Services Reform Act.

3. Please describe your current plans for implementation and the timetable for givingeffect to those plans.

As soon as the Act is passed, we envisage an 8 year implementation period. Thiswill include the creation of an institutional framework, review of our structure,operational framework and developing a regulatory capability.

These are only sample answers. Your actual answers to the questions will, of course,reflect your own circumstances.

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Principles relating to the Regulator

Principle1: The responsibilities of the regulator should be clear andobjectively stated.

1. What is your assessment of the current status of your jurisdiction regardingimplementation of this Principle?

Implemented Partially implemented Not Implemented

1.1 If implemented:

1. Please describe how this principle has been implemented.

2. Are further improvements or changes proposed? If so, please describe.

1.2 If partially implemented:

1. Please describe what has been done with regard to implementation andwhat remains to be done.

2. Do needed improvements or amendments relate primarily to:

Definition ofresponsibilities

Co-operation withother agencies

Legal protection ofregulators and staff

Others (Pleasedescribe)

3. Please describe the major impediments that exist with regard toimplementation. Are there areas in which you would welcome assistance inorder to achieve full implementation?

4. Please describe your current plans for implementation and the timetable forgiving effect to those plans.

1.3 If not implemented:

1. What steps are you taking to ensure that implementation efforts are initiatedin the near future:

Requesting changes tosecurities legislation orregulation

Seeking improvements in co-operation with other authorities


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3. Please describe your current plans for implementation and the timetable for

giving effect to those plans.

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Principle 2: The regulator should be operationally independent andaccountable in the exercise of its functions and powers


Implemented Partially implemented Not Implemented________________________________________________________________

2.1 If implemented:

1. Please describe how this principle has been implemented:





Stable fundingsource

Independence from politicalor commercial interference

Publicaccountability of theregulator

Others(Pleasedescribe)

3. Please describe the major impediments that exist with regard to

implementation. Are there areas in which you would welcome assistance inorder to achieve full implementation?




Requestingchanges tolegislation orregulation

Seeking changesto fundingarrangements

Seeking improvementsto the accountabilityarrangements


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Principle 3: The regulator should have adequate powers, proper resourcesand the capacity to perform its functions and exercise its powers.


Implemented Partially implemented Not Implemented_________________________________________________________________

3.1. If implemented:






Range of powersgiven to regulator

(Identify the area)

Properresources

Quality andtraining of

staff

The skill levelof theregulatorsstaff

Others(Please

describe)





Requesting changes tolegislation or regulation

Seeking adequateresources

Upgrading staffskills


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Principle 4: The regulator should adopt clear and consistent regulatoryprocesses.



4.1 If implemented:






Public disclosure andtransparency of regulatoryprocesses

Procedures for policyformulation






Public disclosure andtransparency of regulatoryprocesses

Procedures for policyformulation

Others (Please describe)

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Principle 5: The staff of the regulator should observe the highestprofessional standards including appropriate standards of confidentiality.



5.1 If implemented:






Avoidance bystaff of conflictsof interest

Observance of rulesof proceduralfairness,confidentiality, etc

The appropriateprotection ofconfidentialinformation






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Introduction of Codes ofConduct or other writtenguidance for staff





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Principles for Self-Regulation

Principle 7: SROs should be subject to the oversight of the regulator andshould observe standards of fairness and confidentiality when exercisingpowers and delegated responsibilities.



7.1 If implemented:





2. Are needed improvements/amendments related primarily to:

Requirements for

authorisation of SROs

Arrangements for

oversight of SROs

Co-operation

between regulatorand SROs

Others

(Pleasedescribe)





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Seeking changesto rules of SROs

Entering into arrangementsbetween the Regulatorsand SROs to clarify rolesand responsibilities




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Principles for the Enforcement of Securities Regulation

Principle 8: The regulator should have comprehensive inspection,investigation and surveillance powers.



8.1 If implemented:






The powers to requireinformation

Upgrading inspection,investigation and surveillance

techniques, resources andequipment

Others (Pleasedescribe






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Seeking the powers to carryout inspections,investigations or surveillance




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Principle 9: The regulator should have comprehensive enforcement powers.

9. What is your assessment of the current status of your jurisdiction regarding

implementation of this Principle?


9.1 If implemented:




1 Please describe what has been done with regard to implementation andwhat remains to be done.


The comprehensiveness ofenforcement powers

Relationships with otheragencies responsible forenforcement of the law







Seeking improvements in co-operationbetween agencies with responsibility for theenforcement of the law


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Principle 10: The regulatory system should ensure an effective and credibleuse of inspection, investigation, surveillance and enforcement powers andimplementation of an effective compliance program.



10.1 If implemented:






Resources for

supervisory andenforcementactivities

Expertise

and skills ofstaff

Framework for

supervisory andenforcementactivities

Deployment

of resources

Others

(Pleasedescribe)






Seekingimprovedresources

Upgrading staffskills


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Principles for Cooperation in Regulation5

Principle 11: The regulator should have authority to share both public andnon-public information with domestic and foreign counterparts.





2 Are further improvements or changes proposed? If so, please describe.




Power to requestfrom and discloseto domesticcounterparts

Power to request fromand disclose toforeign counterparts

Confidentiality /secrecy / privacylaws




5The matters addressed in Principles 11- 13 were previously considered by IOSCO Members as part of the

self-evaluation on Commitment to Basic IOSCO Principles of High Regulatory Standards and Mutual

Co-operation and Assistance. Members may wish to refer to that self-evaluation in considering their

answers to this part of the survey.

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Seeking powers to enter intoco-operative arrangementswith domestic counterparts

Seeking powers toenter into co-operativearrangements withinternationalcounterparts





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Principles for Cooperation in Regulation

Principle 12: Regulators should establish information sharing mechanismsthat set out when and how they will share both public and non-publicinformation with their domestic and foreign counterparts.









Confidentiality/Secrecy/PrivacyLaws

MOUs or other co-operation arrangementswith domesticcounterparts

MOUs or othercooperationarrangements withforeign counterparts







Requesting changes tolegislation or regulation.

Entering into MOUs orother co-operationarrangements .


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Principles for Cooperation in Regulation

Principle 13: The regulatory system should allow for assistance to beprovided to foreign regulators who need to make inquiries in the dischargeof their functions and exercise of their powers.









Powers of the regulator to

assist foreign regulators

MOUs or other co-operation

arrangements

Others (Please

describe)






Entering into MOUs or other co-operation arrangements


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Principles for Issuers

Principle 14: There should be full, accurate and timely disclosure offinancial results and other information which is material to investorsdecisions.









Requirementsmandatingcircumstances inwhich disclosure isrequired

Content andtimeliness ofdisclosures

Developing sanctionsor civil liability fornondisclosure andenforcement ofrequirements




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Requesting changes to legislation orregulation

Sanctions / liability for non-disclosure




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Principle 15: Holders of securities in a company should be treated in a fairand equitable manner.









Disclosure of majorshareholdings.

Protection of the interests ofshareholders (in particular minority

shareholders) in cash offers, offers byway of tender and exchange, businesscombinations and privatizations.




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Requesting changes to legislationor regulation

Improving disclosure practices Others (Pleasedescribe)



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Principle 16: Accounting and auditing standards should be of a high andinternationally acceptable quality.









Quality ofaccounting andauditingstandards

Improved enforcement ofcompliance with standards

Independence andquality of audits






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Developing or seeking theadoption of high qualityaccounting and auditingstandards

Enforcingcompliance withstandards





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Principles for Collective Investment Schemes

Principle 17: The regulatory system should set standards for the eligibilityand the regulation of those who wish to market or operate a collectiveinvestment scheme.









Collective Investment

Scheme (CIS)Regulation

Criteria for eligibility to

market or operate aCIS

Supervision of

CIS

Others

(Pleasedescribe)






Supervision of CIS Others (Pleasedescribe)

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Principle 18: The regulatory system should provide for rules governing thelegal form and structure of collective investment schemes and thesegregation and protection of client assets.









Rules about legal form andstructure of CIS

Segregation of client assets







Establishing or amendingrequirements for segregation ofclient assets


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Principle 19: Regulation should require disclosure, as set forth under theprinciples for issuers, which is necessary to evaluate the suitability of acollective investment scheme for a particular investor and the value of the

investors interest in the scheme.









Requirements fordisclosure of the legalform and structure ofthe CIS

Requirements fordisclosure of sufficientinformation to evaluateinvestments

Powers toenforcedisclosurerequirements




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Establishing appropriate disclosure requirements Others (Please describe)



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Principle 20: Regulation should ensure that there is a proper and disclosedbasis for asset valuation and the pricing and the redemption of units in acollective investment scheme.









Requirements forvaluation anddisclosure of the valueof interests in a CIS

Capacity to enforcedisclosure requirements

Requirements forpricing andredemption of units




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Establishingrequirements forvaluation anddisclosure of thevalue of interestsin a CIS

Establishingrules fordisclosure ofpricing andvaluation

Capacity to enforcevaluation anddisclosurerequirements




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Principles for Market Intermediaries

Principle 22: There should be initial and ongoing capital and other prudentialrequirements for market intermediaries that reflect the risks that theintermediaries undertake.







1. Please describe what has been done with regard to implementation andwhat remains to be done. 2. Are needed improvements/amendmentsrelated primarily to:

Initial and ongoingcapital requirements

Prudential requirements formarket intermediaries

Sanctions forfailure to meetprudential

requirements




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Seeking amendments tolegislation or regulation

Establishing adequateinitial and ongoingcapital requirements

Prudentialrequirements




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Principle 23: Market intermediaries should be required to comply withstandards for internal organization and operational conduct that aim toprotect the interests of clients, ensure proper management of risk, and under

which management of the intermediary accepts primary responsibility forthese matters.









The powers of the regulator torequire proper standards ofinternal organization and conduct

The capacity of the regulator tomonitor and enforce standardsof control and conduct





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Seeking changes to legislationor regulation

Establishing or amending powers ofthe regulators capacity to monitor andenforce standards of control andconduct




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Principle 24: There should be a procedure for dealing with the failure of amarket intermediary in order to minimize damage and loss to investors andto contain systemic risk.









The powers of the

regulator to take actionwhen an intermediaryfails

Rules and procedures

for dealing with failuresof intermediaries

Co-operation with

other regulators

Others

(Pleasedescribe)



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Implementing co-operativearrangements with otherregulators to address the failure ofintermediaries





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Principles for the Secondary Market

Principle 25: The establishment of trading systems including securitiesexchanges should be subject to regulatory authorization and oversight.









The powers ofregulator to authorizetrading systems and

exchanges

Minimum standards forthe authorization oftrading systems and

exchanges

Powers to conductproper ongoingsupervision




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Seeking changes tolegislation orregulation

Establishing oramending powers forauthorization andsupervision of tradingsystems andexchanges

Establishingminimum standardsfor trading systemsand exchanges




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Principle 26: There should be ongoing regulatory supervision ofexchanges and trading systems which should aim to ensure that theintegrity of trading is maintained through fair and equitable rules that strike

an appropriate balance between the demands of different marketparticipants.









Power to supervise on an ongoing basiscompliance with approval conditions fortrading systems and exchanges




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Establishing or amending powers tosupervise the activity of trading systemsand exchanges




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Principle 27: Regulation should promote transparency of trading.

27. What is your assessment of the current status of your jurisdiction regarding

implementation of this Principle?








Availability of pre-trade andpost-trade information

Timely access and availability ofinformation about trading




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Requesting changes to legislationor regulation

Making available pre-trade andpost-trade information




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Principle 28: Regulation should be designed to detect and determanipulation and other unfair trading practices.









The law or regulationsgoverning market

manipulation and otherunfair trading practices

Capacity tomonitor market

trading

Enforcementpowers and

resources




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Seeking changes tolegislation orregulation

Establishing oramending the capacityto monitor markettrading

Establishing oramendingenforcementpowers.




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Principle 29: Regulation should aim to ensure the proper management oflarge exposures, default risk and market disruption.









Definition oflarge

exposures

Monitoringof large

exposures

Proceduresrelating to defaults

and marketdisruption

Co-operationbetween market

authorities

Others(Please

describe)



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Improved co-operationbetween marketauthorities

Establishing the definition oflarge exposures




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Principle 30: Systems for clearing and settlement of securities transactionsshould be subject to regulatory oversight, and designed to ensure that theyare fair, effective and efficient and that they reduce systemic risk.









The power of regulatorto oversee clearing andsettlement systems

The power of theregulator to setoperational standardsfor clearing andsettlement systems

Adequate rulesrelating to margining

/ netting / shortselling etc




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Requesting changesto legislation orregulation

Establishing powersto set operationalstandards

Establishingpowers tosuperviseclearance andsettlement systems




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