Derivatives
The International Organization of Securities Commissions (IOSCO) has updated its principles for the regulation and supervision of commodity derivatives markets. It is the first major overhaul of this core guidance since 2011. IOSCO said the changes were designed ‘to provide a resilient framework for the regulation and oversight of the commodity derivatives markets’, taking account of recent market developments and international events, such as the Covid-19 pandemic and Russia’s invasion of Ukraine.
A new ‘principle 16’ on unexpected disruptions aims to guide regulators in restoring orderly markets following shock events, helping market participants create contingency plans and processes to respond to surprises. Other changes to IOSCO’s now revised 24 principles have focused on market surveillance, transparency, price discovery, correlation with physical markets, responding to market abuse, and strengthening trading venue enforcement powers.
Investment funds
IOSCO has published a second edition of its Investment Funds Statistics Report, providing new insights into the global investment funds industry. Among the findings, the report noted that, ‘at an aggregate level, and in normal market conditions, hedge funds’ portfolio liquidity considerably exceeds the liquidity offered to investors, meaning that they should be able to meet investor redemptions’.
Business combinations
The International Accounting Standards Board (IASB) has announced plans to release an exposure draft on proposed changes to disclosures, goodwill and impairment in the IFRS 3, Business Combinations, standard. The focus is on how companies can disclose better information about business combinations, and improvements to the impairment-only goodwill accounting model.
Public sector
The International Public Sector Accounting Standards Board (IPSASB) has released draft guidance on financial reporting for concessionary leases and right-of-use assets in kind. The guidance will amend IPSAS 43 on leases and IPSAS 23 on revenue from non-exchange transactions (taxes and transfers). The consultation will last until 17 May 2023.
Audit
The International Auditing and Assurance Standards Board (IAASB) has launched a public consultation on a group audit-specific section of its proposed streamlined standard for less complex entities. Group audits were not included in the scope of the original Exposure Draft. Given stakeholder feedback, the IAASB reconsidered its decision to exclude group audits and developed proposals that address audits of less complex groups. The consultation will last until 2 May 2023.
Sustainability
The Global Reporting Initiative (GRI) has released a draft standard promoting sustainability reporting in the mining sector – of significant importance for many emerging markets. The standard’s 25 topics span environmental issues such as climate change, greenhouse gas emissions and air pollutants, biodiversity, water and waste. Social concerns covered include community engagement and human rights, land and resource rights, modern slavery and forced labour. Also addressed are economic factors such as policies on anti-corruption, procurement, and payments to governments. New topics include tailings facilities, small-scale mines and operating in conflict zones. The draft is open for comment until 30 April 2023.
Four new translations of GRI’s universal standards that run through its sector-based sustainability reporting guidance have been released. The latest four translations are in French, German, Italian and Bahasa Indonesian.
Technology
The IAASB’s technology consultation group has released guidance on investigating exceptions from anticipated audit assessments when using automated tools and techniques. The advice also helps auditors consider performance materiality when undertaking automated audits.
Climate data
Data from environmental disclosure platform CDP has shown that companies are responding slowly to upcoming mandatory climate data disclosure. In 2022, more than 4,000 (out of 18,600) companies disclosed they had a climate transition plan. Just 81 (0.4%) disclosed data against 21 key indicators that the CDP says indicates a credible climate transition plan.
Ethics
The International Ethics Standards Board for Accountants (IESBA) is to hold four global roundtables to help assess accounting sector views on its development of new ethics and independence standards for sustainability reporting and assurance. The roundtables will be held in Australia, France, Singapore and the US.
