Markets as Regulators: A Survey

144 Pages Posted: 31 Jan 2007 Last revised: 28 Jan 2009

See all articles by Stavros Gadinis

Stavros Gadinis

University of California, Berkeley - School of Law

Howell E. Jackson

Harvard Law School

Date Written: June 1, 2007


In this paper we explore the allocation of regulatory responsibilities to market infrastructure institutions, administrative agencies and central government entities in the eight most influential jurisdictions for securities regulation in the world. After reviewing the academic literature on the role of self-regulatory organizations in the oversight of modern stock exchanges, we report the results of a survey of the allocation of regulatory powers in a sample of eight key jurisdictions. In that survey, we examine the allocation of such powers in three levels: rulemaking, monitoring of compliance with these rules, and enforcement of rules violations. Based on our findings, we categorize these jurisdictions in three distinct models of allocation of regulatory powers: a Government-led Model, that preserves significant authority for central government control over securities markets regulation albeit with a relatively limited enforcement apparatus (France, Germany, Japan); a Flexibility Model, that grants significant leeway to market participants in performing their regulatory obligations but relies on government agencies to set general policies and maintain some enforcement capacity (UK, Hong Kong, Australia); and a Cooperation Model that assigns a broad range of power to market participants in almost all aspects of securities regulation but also maintains strong and overlapping oversight of market activity through well-endowed governmental agencies with more robust enforcement traditions (US, Canada).

JEL Classification: G28, K22, K23

Suggested Citation

Gadinis, Stavros and Jackson, Howell Edmunds, Markets as Regulators: A Survey (June 1, 2007). Southern California Law Review, Vol. 80, p. 1239, 2007, Available at SSRN: or

Stavros Gadinis (Contact Author)

University of California, Berkeley - School of Law ( email )

215 Boalt Hall
Berkeley, CA 94720-7200
United States

Howell Edmunds Jackson

Harvard Law School ( email )

Griswald 402
1563 Massachusetts Avenue
Cambridge, MA 02138
United States
617-495-5466 (Phone)
617-495-5156 (Fax)

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