Global securities regulators have formed a trio of task forces to coordinate global regulatory efforts to tackle trading abuses related to short selling, derivatives trading, and activity by unregulated entities such as hedge funds.

The International Organization of Securities Commissions Technical Committee announced the launch of the three task forces following a Nov. 24 meeting to craft a detailed work program to address the continuing market turmoil. The task forces will present their reports at the next Technical Committee meeting in February 2009 and to the next G-20 summit in spring 2009.

“To be effective, the regulation of trading abuses must be coordinated across major markets,” said SEC Chairman Christopher Cox, chairman of IOSCO’s Technical Committee. Cox said the task forces will help ensure that global capital markets address the current turmoil on “a sound basis and in a well-coordinated way.”

A Short Selling Task Force, chaired by the Securities and Futures Commission of Hong Kong, will work to eliminate gaps in various regulatory approaches to naked short selling, including delivery requirements and disclosure of short positions. The Task Force will also examine how to minimize adverse impacts on legitimate securities lending, hedging, and other transactions.

The Unregulated Financial Markets and Products Task Force, co-chaired by the Australian Securities and Investments Commission and the Autorité de Marché Financiers of France, will examine ways to introduce greater transparency and oversight to unregulated market segments, such as OTC markets for derivatives and other structured financial products.

An Unregulated Financial Entities Task Force, chaired by the CONSOB of Italy and the Financial Services Authority of the United Kingdom, will examine issues surrounding unregulated entities such as hedge funds, including the development of recommended regulatory approaches to mitigate risks associated with their trading and traditional opacity.