Securities regulation in the international environment.
PhD thesis, University of Glasgow.
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It is undisputed that the world’s securities markets are becoming increasingly international and increasingly integrated. The internationalization of the world’s securities markets is one of the most significant developments affecting the securities markets of many nations. “How should regulators respond?” is an issue that is hotly contested. The purpose of this thesis is not to introduce a new theory but rather to offer a comprehensive analysis of past and present practice, in order to identify what is effective and what is not.
There are three competing approaches to international securities regulation – harmonization, regulatory competition and cooperation. Thus the thesis analyzes these three leading current theoretical arguments in turn as paradigms for international securities regulation. On this basis, the paper will focus on these three approaches and address the fundamental questions posed by the internationalization of securities markets: which regulatory approach is the proper and best way to govern securities regulation in the new international market? Are there any areas which need to be improved? And therefore, how can international regulation be improved? The thesis will answer these questions in two ways: in theory and in practical application. With regard to theory, the thesis examines the definitions and arguments given to each approach. Harmonization is the idea that rules and regulations should be standardized across countries as much as possible. In contrast to the harmonization is the regulatory competition approach. Under this model, countries do not coordinate with one another – each country is free to enact whatever rules and regulations it chooses. Whereas, the third approach cooperation traditionally is an instrument to reduce conflicts and tensions. International cooperation is defined as conscious policy coordination among states. On a practical level, the thesis delineates the current stage of harmonization, regulatory competition and cooperation developments in the EU, US, as well as internationally.
It should be recognized that each of the three securities regulatory approaches analyzed in this thesis have contributed much towards international securities regulation. However, as discussed each approach has its problems, none is perfect. As long as there are regulations, there will be abuses and room for improvements. One of major problem in the international arena is that there are no international law-making institutions vested with legal authority to address these issues. Instead of a formal international securities regulator there is a set of international institutions which include a limited number of countries which produce standards and norms that are then adopted by national authorities on a voluntary basis. Because of the diversity, complexity, and universality of issues likely to continue to arise over the next decade, a single international body should be considered to facilitate world cooperation in addressing these issues.
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