FACTBOX-FSB reviews G20 market regulation pledges

BASEL, Switzerland, June 27 (Reuters) - The Financial Stability Board held its inaugural meeting on June 26-27 and reviewed progress on regulatory pledges made in April by the G20 group of industrialised and emerging market countries.

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The FSB was set up by the G20 to oversee stability of the financial system and ensure that regulatory principles agreed globally are applied consistently in each country.

The FSB comprises all G20 countries and is the successor of the Financial Stability Forum, an informal G7 body.

FSB Chairman, Mario Draghi, said significant progress has been made since April and many initiatives will be in place by year end.

Progress so far on key G20 pledges:

-- Simplifying accounting rules by end of 2009: FSB welcomed moves by the International Accounting Standards Board to accelerate work on a new fair value rule. FSB agreed that achieving convergence of accounting rules used in the United States, European Union and Japan is a top priority.

-- Bank capital rules: FSB said the Basel Committee of Banking Supervisors will make an integrated proposal by the end of 2009 to strengthen bank capital and liquidity rules. They are likely to take effect from late 2010.

-- Registration and supervision of hedge funds and credit rating agencies: FSB stressed need for a consistent approach to regulating hedge funds and credit rating agencies, particularly in the United States, EU and Japan. Hedge funds complain that EU plans to regulate the sector are far tougher than U.S. plans.