The International Federation of Accountants (IFAC) has called for the G20 to implement regulatory convergence in the financial sector and discourage national regulatory reforms
The IFAC made 15 recommendations in its report, Regulatory Convergence in Financial Professions and Industries, which it issued to the G20 deputies in September. It has issued an update to the report today, taking into account changes since the report was first published.
The IFAC’s Private Sector Taskforce has called in particular for the G20 to:
• Continue to focus on regulatory convergence in the financial sector, ensuring that G20 nations work together to identify and narrow gaps in regulatory practice
• Discourage nations from implementing unilateral national regulatory reforms that are inconsistent with international standards and that widen - rather than narrow - the convergence gap.
The update provides a discussion of matters that have arisen since the report was issued, including examples of where regulatory convergence has moved forward. It refers to the introduction of Legal Entity Identifiers, adoption of International Financial Reporting Standards (IFRS), and the adoption of International Standards on Auditing (ISAs).
The update also notes examples where international regulatory arrangements have become more fragmented. See the full report, including updates, here.
IFAC has also made additional recommendations over public sector financial management and reporting, transparency and accountability.
IFAC CEO Ian Ball, said, “It is imperative the G20 follow through on the PSTF's initial 15 recommendations outlined in the 2011 report. It is equally important the G20 evaluate and respond to crucial matters that have become even more critical since the report was issued, such as the sovereign debt crisis.”
The PSTF was established in May 2011 at the request of the presidency of the G20.
The initial report provided the G20 with an analysis of the development of financial policy and regulation, with the aim of facilitating economic stability in the world’s capital markets.