In February 1993, at its meeting in Trinidad and Tobago, the Technical Committee created a Working Group with a mandate to identify equivalence in the regulatory framework for collective investment schemes, for the purpose of eliminating barriers to cross-border distribution, and ways to enhance regulatory co-operation in relation to collective investment schemes and their operators.

This Report, which has been adopted by the Technical Committee, is the Group's response to the first part of that mandate, addressing the relevant issues in relation to collective investment schemes investing primarily in securities. It does not cover schemes investing in property/real estate or venture capital, or closed end schemes, nor schemes that invest primarily in derivatives.

In carrying out this part of its mandate the Group undertook an analysis of the relevant international laws and practices. While the analysis demonstrated that member countries take a variety of approaches to regulating collective investment schemes, the Group identified a number of fundamental regulatory concepts that exist in each system. From these fundamental concepts the Group developed a set of core Principles that are considered important by member countries for the regulation of collective investment schemes falling within the scope of the Group's consideration.

In identifying the Principles it was recognised that, while there are general concepts common to most regulatory systems, there may be alternative approaches to the implementation of those concepts in seeking to achieve comparable levels of investor protection. The explanatory memorandum that accompanies the Principles illustrates by reference to different jurisdictions that there are a number of different ways of regulating collective investment schemes to achieve investor protection.

Neither the Principles nor the memorandum is intended to endorse the efficacy of any one system over another. Nothing in the Principles is in any way binding on any member country.

The Principles should provide guidance to member countries in their regulation of collective investment schemes, which is particularly important in the context of the globalisation of securities markets and investment advisory services. Development of the Principles will enhance co-operation among member countries in supervising and overseeing the increasingly internationalised investment management industry. The Principles will also provide guidance for industry participants on the standards to be achieved by collective investment schemes seeking to access international markets.

As well as providing for greater understanding of member countries' systems of regulation, the Principles provide a foundation for the development of existing and future relationships among members. To the extent permitted by their legal and regulatory frameworks, member countries should be able to take the Principles into account in any facilitation of the marketing of foreign collective investment schemes in their jurisdiction.

The Principles are considered to be an important first stage in the facilitation and encouragement of international regulatory co-operation.