Intermarket Surveillance Group - Explained
What is an Intermarket Surveillance Group?
Written by J. Mance Gordon
Updated at April 22nd, 2024
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What is an Intermarket Surveillance Group?
The Intermarket Surveillance Group (ISG) serves to disperse information to regulators and security exchanges in various states and countries. It comprises over fifty organizations from various parts of the world. This group was established by US exchanges in 1981. The financial regulators comprising its member countries hail from Asia, North America, Australia, Europe, and the Middle East. Apart from its financial regulators, ISG also has securities and futures exchanges.
How Does the Intermarket Surveillance Group Work?
This group oversees the activities of the financial market and also spots cases of fraud in the market. The outcome is distributed to the group members and this enables the specific member to investigate and act based on the fraud incident. An obligatory rule is information sharing amongst members and as a prerequisite to attaining membership, local regulations should not obstruct information sharing. This group converges at least twice a year. Confidentiality within the group is utmost in terms of information and this information should function for regulatory monitoring. This organization has progressed since 1990 when it successfully developed for non-US exchanges, an affiliate membership. Since this development, there has been a continuous addition of markets as affiliates, as well as, the addition of more exchanges. Intermarket Surveillance Group is not a rule creation body neither is one that punishes offenders. It solely shares the information to the local regulators who are members of this group. These local regulators engage in the monitoring and investigation of financial market activities that are questionable. The scope of ISG shifted from monitoring only the US market to markets all over the world when they stopped differentiating full-time members from affiliates in 2008. In order to simplify the monitoring of the global market, sub-groups were created and they comprise Membership, Derivatives, Surveillance, Practices, Forum and Events, and US Members, and also Non-US Members.