The Hardening of Soft Law in Securities Regulation

Brooklyn Journal of International Law, Vol. 34, 2009

Brooklyn Law School, Legal Studies Paper No. 141

70 Pages Posted: 1 Apr 2009 Last revised: 8 May 2009

Claire Kelly

Brooklyn Law School

Roberta S. Karmel

Brooklyn Law School

Date Written: March 31, 2009

Abstract

Securities law regulation frequently utilizes soft law, or non binding standards and principles of conduct. Often soft law standards have hardened into treaties, statutes or rules. As securities regulation becomes more international, this trend will continue. Numerous international bodies are involved in the development of securities standards and many of them operate by building consensus among experts in an informal setting. This Article discusses four examples of the use and hardening of soft law in the international realm: the establishment of international financial reporting standards; the development of MOUs; the negotiation of an anti-bribery treaty; and the regulation of credit rating agencies. Soft law norm development thus allows for speed, flexibility and expertise necessary to respond to fast breaking developments. Despite problems of authority, process, and legitimacy, the authors argue that soft law securities regulation is generally desirable internationally as it counteracts competitive races to the bottom, and makes regulatory cooperation more palatable.

Keywords: securities law, corporate, soft law, financial regulation, international

Suggested Citation

Kelly, Claire and Karmel, Roberta S., The Hardening of Soft Law in Securities Regulation (March 31, 2009). Brooklyn Journal of International Law, Vol. 34, 2009; Brooklyn Law School, Legal Studies Paper No. 141. Available at SSRN: https://ssrn.com/abstract=1371188

Claire Kelly (Contact Author)

Brooklyn Law School ( email )

250 Joralemon Street
Brooklyn, NY 11201
United States

Roberta S. Karmel

Brooklyn Law School ( email )

250 Joralemon Street
Brooklyn, NY 11201
United States
(718) 780-7946 (Phone)
(718) 780-0375 (Fax)

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