A GLOBAL financial watchdog said it would boost its efforts to bring into line "uncooperative" national regulators who fail to implement international standards designed to help prevent a repeat of the financial scandals of recent years.
The Madrid-based International Organisation of Securities Commissions (Iosco) unveiled an action plan after a study of regulatory issues raised by scandals at companies such as Enron, WorldCom and Parmalat.
Tackling countries that are "historically under-regulated and uncooperative jurisdictions posing the most significant threat to the global financial system" will be a priority, the group said.
"By reviewing the regulation of global capital markets as an entire interlocking system, Iosco has been able to identify where weaknesses in the system are, and set its priorities accordingly," said Andrew Sheng of the Hong Kong Securities and Futures Commission and chairman of the Iosco committee that drew up the plan.
Iosco declined to name countries which were considered regulatory weak spots.
Better vigilance among corporate issuers, investors, auditors and analysts was also needed to avoid corporate fraud, Iosco said.
"We are doing more the carrot approach rather than the stick approach at this stage. The emphasis is that the standards are already there and it is more a matter of encouraging members to implement them," an Iosco spokesman said.
Under its plan, Iosco will use its own standards as the benchmark for assessing how prospective Iosco members go about implementing regulation
Uncooperative members may eventually be thrown out of Iosco unless there is a willingness to consult and co-operate with fellow members, the organisation added.
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