What Is the Intermarket Surveillance Group (ISG)?

The Intermarket Surveillance Group (ISG) is comprised of more than 50 organizations worldwide, including market regulators and exchanges from various countries around the world. The objectives of the group are to monitor and identify manipulative or fraudulent activities in the financial markets and to share information between members. Information sharing allows the group to undertake investigations and/or impose disciplinary action against offending parties. 

Key Takeaways

  • The Intermarket Surveillance Group (ISG) is comprised of more than 50 organizations worldwide, including market regulators and exchanges from various countries around the world.
  • The objectives of the group are to monitor and identify manipulative or fraudulent activities in the financial markets.
  • The Intermarket Surveillance Group (ISG) was created in 1981 by U.S. exchanges to share information across different jurisdictions and with the various financial exchanges and regulators.
  • In 1990, an affiliate membership category was created to allow non-U.S. exchanges to join the group; the organization has continued to grow as global exchanges and economies become more interlinked. 

Understanding the Intermarket Surveillance Group (ISG)

The Intermarket Surveillance Group (ISG) was created in 1981 by U.S. exchanges to share information across different jurisdictions and with the various financial exchanges and regulators. In 1990, an affiliate membership category was created to allow futures exchanges and non-U.S. exchanges to join the group. The organization has continued to grow as global exchanges and economies become more interlinked. The intent of the ISG was to have a broader scope than traditional local regulators by utilizing local, domestic, and international organizations to monitor and identify fraudulent market practices.

In 2008, the ISG scrapped the distinction between the affiliate and full membership. The focus also shifted to monitoring other member markets, and not just the U.S. markets. Membership in the ISG is open to regulated financial market centers that have the ability and regulations to monitor and pursue disciplinary action against manipulative or fraudulent practices. The member must be allowed to share information with other ISG members.

The ISG itself does create rules or impose disciplinary action. Rather, the information sharing between members allows for the proper authority, regulator, or exchange to make appropriate rule changes or impose legal action on offending parties based on evidence gathered. The group is composed of all U.S. securities and futures exchanges, as well as U.S. financial market regulators/associations. There are also members from other countries in North America, Australia, Asia, the Middle East, and Europe.

Information sharing is mandatory among members, and can't be blocked by local regulations, as such regulations would preclude membership. Information shared between members must be kept confidential, and can only be used for regulatory purposes. Information is shared upon request and on an as-needed basis. Within the US, much of the information is shared electronically between members. The ISG typically has meetings twice a year, or more. 

Special Considerations

Intermarket Surveillance Group Subgroups

To help monitor the wide scope of global/member's market surveillance, the ISG has several subgroups that focus on different areas. These subgroups are Technology, Membership, Surveillance, Derivatives, Forum and Events, Practices, US Members, and Non-U.S. Members.