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Global securities regulators are proposing a series of policy recommendations that aim to set standards for the fledgling decentralized finance (DeFi) sector.

The International Organization of Securities Commissions (IOSCO) published a report that detailed nine policy proposals designed to address regulators’ investor protection concerns in the DeFi space, which includes financial products and services that use blockchain technology and self-executing “smart” contracts.

“One of IOSCO’s goals is to promote greater consistency with respect to the regulation and oversight of cryptoasset activities, given the cross-border nature of the markets, potential for regulatory arbitrage and significant risk of harm to retail investors,” the group said in the report.

The proposals also aim to establish consistency in the regulation of both traditional financial markets and crypto markets, implementing the approach taken by global policy-makers in the crypto space, with the principle of “same activity, same risk, same regulatory outcome.”

The group said its proposed recommendations also “cover the need for enhanced cooperation among regulators to coordinate and respond to cross-border challenges in enforcement and supervision, and to address regulatory arbitrage concerns, that arise from the cross-border nature of global cryptoasset activities conducted by DeFi participants who often offer their products and services across multiple jurisdictions.”

“By supporting greater consistency of regulatory frameworks and oversight across member jurisdictions, the DeFi recommendations complement the crypto and digital assets recommendations published in May,” said Jean-Paul Servais, chair of the IOSCO board, in a release.

“Once finalized, the two sets of recommendations will provide a first clear, interoperable, and globally consistent policy framework for crypto- and digital assets, including DeFi,” he said.

Tuang Lee Lim, chair of IOSCO’s fintech task force, said, “There is a common misconception that DeFi is truly decentralized and governed by autonomous code or smart contracts. In reality, regardless of the operating model of the DeFi arrangement, ‘responsible persons’ can be identified. Our recommendations are therefore predicated on the need to identify these persons, whether legal or natural, who should bear responsibility for upholding investor protection and market integrity.”

The deadline for responding to the consultation is Oct. 19. IOSCO aims to finalize its recommendations by the end of the year.