SWX Receives IOSCO Recognition For IFRS Decisions

by Ulrika Lomas, for LawAndTax-News.com, Brussels

09 May 2007

The SWX Swiss Exchange (SWX) has received authorisation to participate in a database for IFRS (International Financial Reporting Standards) decisions, which was established this year by IOSCO (International Organization of Securities Commissions) - the first non-state organisation to have done so.

The aim of the database is to facilitate global coordination between regulators charged with the enforcement of IFRS. This entitlement to participate in the database represents international recognition of SWX’s performance record in its regulatory activities.

SWX has so far become the first and only non-state organisation to be granted the right to participate in the IFRS database of IOSCO, the global umbrella organisation for securities exchange supervisors. In achieving that, SWX was subjected to a rigorous assessment by IOSCO of its processes and performance record. This authorisation to participate represents international recognition of SWX’s regulatory achievements.

Due to the global significance of IFRS as the accounting standard for many listed companies, there is great interest in ensuring that its provisions are applied and enforced consistently throughout the world. National peculiarities and divergent interpretations of the standard are to be avoided. To that purpose, IOSCO created an IFRS database that has been in operation since 19 January 2007.

The aim of the database is to make available to participating regulators a reference source with anonymised data on IFRS decisions. This non-public compendium of data will enable regulators for the first time to assess on a consistent basis the interpretation of the standard also at the international level. The SWX said that thanks to the database, uncertainties and problems in the international application of IFRS will be identified at an early stage and forwarded to the standard-setter, and also lead to a qualitative improvement of IFRS. Moreover, the broad reach of the database will also serve regulators as an early-warning system for widespread deficiencies in the application of IFRS, which as well will lead to more consistent enforcement and hence implementation of the standard.

For participating regulators like SWX, as well as their issuers who apply IFRS, the database is a future-oriented step, especially in terms of securities that are listed on several exchanges. Through use of the database, a greater degree of professionalism will be achieved in the area of enforcement activities relating to accounting standards. The resulting harmonisation in the application and enforcement of IFRS at a global level will lead to a more efficient functioning of the capital markets.

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