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How has the pandemic affected the implementation and enforcement of the International Securities Law?

Elliana Lorincz

The COVID-19 pandemic has had a significant impact on almost every aspect of our lives, including the implementation and enforcement of International Securities Law. In fact, the pandemic has completely changed the way we operate, especially for investors, regulators, and other stakeholders in the securities industry.

One of the most urgent impacts of the pandemic on International Securities Law is the sudden shift to remote work. With countries imposing lockdowns and social distancing measures, many law firms, regulatory agencies, financial institutions, and other securities industry stakeholders have been forced to implement online communication and remote work arrangements. This has led to a rise in virtual meetings, webinars, and e-signatures to adhere to social distancing requirements. Although these virtual work methods have proven to be a game-changer in terms of efficient and cost-effective communication, they have also come along with cybersecurity risks, which is why the legal industry has seen a sharp increase in cyber attacks and data breaches.

Moreover, as a result of the pandemic, several countries have been forced to introduce extraordinary measures to alleviate the pandemic's economic effects on the securities market. A case in point, the United States' Federal Reserve took unprecedented measures, including purchasing unlimited amounts of US Treasury bonds, cutting interest rates and offering low-cost loans in a bid to keep the market wheels turning. These measures have also been implemented in other parts of the world, like Australia, Asia, and Europe, where central banks have unveiled various stimulus packages in support of their economies, providing relief to businesses and investors.

Another impact the pandemic has had is the altering of many Securities and Exchange Commission (SEC) reporting deadlines. SEC issued temporary relief to reporting companies and funds due to the pandemic's challenges. The extension of reporting deadlines gave companies more time to report their financial results, but it also opened up a new window for abusive practices and potential fraud. Amidst the pandemic, previously unimaginable practices, such as pump-and-dump schemes, insider trading, and other manipulative practices soared, thereby significantly challenging regulators' ability to protect investor confidence and market stability.

As it stands, the pandemic has not only challenged the implementation and enforcement of securities law globally, but it has also led to several policy modifications aiming to cushion the market from the harsh effects of the pandemic. The full extent of the pandemic's impacts on International Securities Law remains to be seen, but it underscores the profundity of the market's vulnerability, thus calling for concerted efforts from stakeholders in the securities industry to achieve market stability amidst unprecedented challenges.