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Article
Publication date: 11 May 2010

Jingyun Ma, Fengming Song and Zhishu Yang

The purpose of this paper is to examine the evolution of China's securities market regulation from 1980 to 2007 and the dual role of the government in this process.

Abstract

Purpose

The purpose of this paper is to examine the evolution of China's securities market regulation from 1980 to 2007 and the dual role of the government in this process.

Design/methodology/approach

When the government is simultaneously the owner and regulator of the securities market, the evolution of securities market regulation follows a path of compulsory institutional change. China's Government authorities have played a dual role in this process by acting both as the securities market regulator and the controlling owner of the stock exchanges. The paper uses the evolution of China's securities market regulation from 1980 to 2007 to illustrate this theoretical framework.

Findings

Using the case of China, this paper provides unique evidence of how securities regulation evolves in response to government direction and supervision if the government is both the owner and the regulator of the securities market.

Originality/value

The paper offers insight into issues of securities market regulation in China and other emerging markets.

Details

Journal of Financial Regulation and Compliance, vol. 18 no. 2
Type: Research Article
ISSN: 1358-1988

Keywords

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Article
Publication date: 1 March 1997

Dana L. Platt and Mark J. McKeefry

The United States Securities and Exchange Commission adopted Regulation S in 1990 to clarify that offshore offers and sales of securities need not comply with the onerous…

Abstract

The United States Securities and Exchange Commission adopted Regulation S in 1990 to clarify that offshore offers and sales of securities need not comply with the onerous registration requirements of US securities laws. In the short time since Regulation S was adopted, a number of issuers have abused the regulation. Amendments designed to curb these abuses have been recently proposed. This paper addresses the impact of the amendments and identifies significant issues to consider when undertaking a Regulation S transaction.

Details

Journal of Financial Regulation and Compliance, vol. 5 no. 3
Type: Research Article
ISSN: 1358-1988

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Article
Publication date: 1 March 2001

Lu'ayy Minwer Al‐Rimawi

This is the second of two papers which examine the question of whether Arab securities regulations can be the subject matter of a methodological study in comparative…

Abstract

This is the second of two papers which examine the question of whether Arab securities regulations can be the subject matter of a methodological study in comparative securities regulation, especially with reference to EU regulations. Part One was published in Journal of Financial Regulation and Compliance Volume Eight, Number Four. This paper addresses the specific juridical impact of Shari'a on capital markets, before looking at its impact on capital market laws of Jordan, Kuwait and Oman. In order to provide an empirical insight into existing Arab securities regulations, the paper also surveys the securities and company laws in the aforementioned countries. Such a discussion also includes a brief examination of market conditions, especially the early factors that accompanied the genesis of such Arab securities markets, notably in Kuwait. The paper concludes by addressing the question of the suitability of the Arab markets selected for this study to comparative studies in EU securities regulation, especially in the context of contemporary internationalisation of securities regulation. It explains in the process why the European experience is relevant (particularly in light of the many EU—Arab association agreements to take effect from 2010, together with EU ‘harmonisation’, ‘minimum standards’, and ‘single passport’ regulatory concepts).

Details

Journal of Financial Regulation and Compliance, vol. 9 no. 3
Type: Research Article
ISSN: 1358-1988

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Article
Publication date: 4 May 2012

Stan Cerulus

The purpose of this paper is to answer a specific research question: How have EU and US regulators translated the idea of central clearing into law?

Abstract

Purpose

The purpose of this paper is to answer a specific research question: How have EU and US regulators translated the idea of central clearing into law?

Design/methodology/approach

A meticulous legal research is carried out. First, the pre‐crisis regulatory regime for credit default swap (CDS) is reviewed, from a securities law angle as well as from a comparative Euro‐American perspective. Next, the regulatory processes leading to the adoption of the central clearing regulations are discussed. Thereafter, a material comparative analysis is made of the provisions related to central clearing in the EU and US regulatory initiatives. Finally, the paper is concluded with an evaluation of both legislations in the light of all previous analyses.

Findings

The research first shows that central clearing regulations rely on a series of presumptions, both concerning the gravity of counterparty risk threats and the necessity of central clearing. Additionally, the EU and US clearing regulations are similar with regard to the broad innovations they introduce, i.e. the mandatory central clearing of a variety of over‐the‐counter derivatives and counterparty risk management requirements for central clearing institutions and for non‐cleared swaps. However, the specific content of the provisions often differs. Furthermore, both legislations are limited to enouncing broad principles. This is also the case for the crucial provisions related to counterparty risk management. Therefore, these provisions in se do not guarantee the proper regulation of counterparty risk management practices. Consequently, much is to be expected from the implementing measures adopted by regulatory institutions.

Originality/value

The paper provides an overview of those provisions in the European and US regulations that specifically concern central clearing for CDS. It is one of the first papers which does this in a very well‐structured and clearly written manner. Also it is one of the first to provide a clear comparison between the provisions in the EU and the US regulations.

Details

Journal of Financial Regulation and Compliance, vol. 20 no. 2
Type: Research Article
ISSN: 1358-1988

Keywords

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Article
Publication date: 1 March 2005

Rizvana Zumeeruddin

In June of 2004, the Securities and Exchange Commission (“the SEC”) voted to publish Proposed Regulation B (“Regulation B”), which will implement provisions of the…

Abstract

In June of 2004, the Securities and Exchange Commission (“the SEC”) voted to publish Proposed Regulation B (“Regulation B”), which will implement provisions of the Gramm‐Leach‐Blily Act of 1999 (“GLBA”) that identify activities which banks may engage in without registering as brokers or dealers under The Securities and Exchange Act of 1934 (“The Exchange Act”); effectively governing the manner in which banks, savings associations and savings banks effect securities transactions. By enacting the GLBA, Congress repealed most of the remaining vestiges of the ownership restrictions that prevented banks, securities and insurance firms from combining, thereby allowing them to adopt the universal banking model through the creation of financial conglomerates known as “financial holding companies.” Proposed Regulation B (“Regulation B”) supercedes the SEC's final interim rules issued in May of 2001 with respect to banking and brokering activities. In general, banks and their regulators have found Regulation B to be far more acceptable than the final interim rules of 2001. On a practical level, Regulation B results in considerably more work for banks. This article will examine the existing law as it pertains to banks engaging in broker‐dealer activities and highlight the key provisions of Regulation B.

Details

Humanomics, vol. 21 no. 3
Type: Research Article
ISSN: 0828-8666

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Article
Publication date: 13 February 2017

Mark Lokanan

This paper aims to examine the enforcement practices of the Investment Dealers Association of Canada (IDA) and argue that self-regulation simply does not work in the…

Abstract

Purpose

This paper aims to examine the enforcement practices of the Investment Dealers Association of Canada (IDA) and argue that self-regulation simply does not work in the financial sector, as the sanctions available are neither applied with sufficient severity nor are the responsibilities for enforcement adequately divided between self-regulation, provincial securities commissions and the police.

Design/methodology/approach

The core compliance data for the study came from the IDA’s tribunal cases that were heard between 1984 and June 2008. The theoretical approach involves the invocation of classic articles by the likes of Stigler, Posner and Becker, the essence of whose conclusions is that institutions will act in their own best interests and cannot be expected to act in the public interest.

Findings

The findings show that over the period from 1984 to 2008, the severity of the sanctions increased consistently over the period. When penalty ceilings were increased, penalties increased. When in the latter phase of the period, public members (i.e. non-members of the industry) chaired the tribunals, penalties also increased.

Research limitations/implications

Researchers can use the data to write a paper which asks “Why did the IDA tribunal penalties increase so consistently with time?” Future research could canvass various possible explanations, including the one presented in this paper, to focus sustained attention on the issue of self-regulation.

Originality/value

This study is the first to systematically examine the enforcement performance of the IDA.

Details

Journal of Financial Regulation and Compliance, vol. 25 no. 1
Type: Research Article
ISSN: 1358-1988

Keywords

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Article
Publication date: 27 November 2007

Stuart J. Kaswell, Alan Rosenblat and Christopher S. Ha

The purpose of this paper is to summarize and explain amendments to SEC Regulation SHO adopted on June 13, 2007

Abstract

Purpose

The purpose of this paper is to summarize and explain amendments to SEC Regulation SHO adopted on June 13, 2007

Design/methodology/approach

The paper explains elimination of “grandfather” exception to Reg SHO close‐out requirement, explains proposed amendments to options market maker exception and long locate requirement, and explains elimination of all price tests that were designed to restrict short selling in bear markets.

Findings

The paper finds that, in June 2007, the Securities and Exchange Commission (SEC) adopted and proposed amendments to the short sales rules under the Securities Exchange Act of 1934 (the “Exchange Act”). The SEC: adopted amendments to Rules 200 and 203 of Regulation SHO to: the eliminate the “grandfather” exception to the “close out” requirement, extend the current close out requirement of 13 consecutive settlement days for securities sales pursuant to Rule 144 under the Exchange Act to 35 settlement days, and update the market decline limitation relating to index arbitrage trading activity;proposed and re‐proposed amendments to Regulation SHO to eliminate the “option market maker” exception to the close out requirement, and to require broker‐dealers making a sale as “long” to document the present location of the securities being sold; and adopted amendments to Rule 10a‐1 and Regulation SHO to repeal all price tests, including the “tick” test, and to provide that no price test, including any price tests of any self‐regulatory organization (“SRO”), shall apply to short sales of any securities. The adopted amendments to Rule 10a‐1 and Regulation SHO to repeal all price tests took effect on July 3, 2007. The other adopted amendments to Regulation SHO will take effect 60 days after publication in the Federal Register.

Originality/value

The paper provides a concise, practical summary by lawyers who specialize securities markets regulations.

Details

Journal of Investment Compliance, vol. 8 no. 4
Type: Research Article
ISSN: 1528-5812

Keywords

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Article
Publication date: 1 April 2006

Ethan W. Johnson

To provide a brief overview of US securities laws that apply to the marketing of hedge funds.

Abstract

Purpose

To provide a brief overview of US securities laws that apply to the marketing of hedge funds.

Design/methodology/approach

Summarizes US securities offering rules, including Regulation S and Regulation D at the federal level, state securities laws, antifraud standards, and broker‐dealer regulation.

Findings

All securities offered and sold in the USA must be registered with the SEC unless an exemption is available under the Securities Act. Offerings offshore under Regulation S and private placements in the USA under Regulation D offer two such exemptions. Most states have private placement exemptions similar to Regulation D. While certain state‐level regulation over the registration of securities has been preempted by federal law, a level of state regulation continues to exist. All US offers and sales of securities are subject to general antifraud standards under both US federal and state laws. Funds and their employees, investment managers and their employees, and any placement agents may not contact any US investor in the USA or any non‐US investor from the USA without registering as broker‐dealers.

Originality/value

Provides a concise overview of laws and regulations that apply to the marketing of hedge funds.

Details

Journal of Investment Compliance, vol. 7 no. 2
Type: Research Article
ISSN: 1528-5812

Keywords

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Article
Publication date: 1 January 1995

RICHARD DALE

As financial markets across the world become more integrated, the potential for financial shocks to be transmitted both from one jurisdiction to another and from one…

Abstract

As financial markets across the world become more integrated, the potential for financial shocks to be transmitted both from one jurisdiction to another and from one financial sector to another increases. At the same time differences in national regulatory arrangements can be the source of important competitive distortions between financial institutions. Against this background national authorities have been seeking to coordinate the regulation of securities firms and of banks undertaking securities business. This paper, which is published in two parts, aims to clarify some of the policy issues arising from recent convergence initiatives by examining the US capital adequacy rules for US investment firms and contrasting the US approach with European securities regulation as formulated in the Capital Adequacy Directive. The second part of this paper will be published in the next issue of Journal of Financial Regulation & Compliance.

Details

Journal of Financial Regulation and Compliance, vol. 3 no. 1
Type: Research Article
ISSN: 1358-1988

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Article
Publication date: 1 February 1999

Lu'ayy Minwer Al‐Rimawi

This paper examines comparative aspects of Arab securities regulation. It provides a general introduction, overviews the aims of securities regulation and the UK…

Abstract

This paper examines comparative aspects of Arab securities regulation. It provides a general introduction, overviews the aims of securities regulation and the UK regulatory framework, and outlines the obstacles facing equity financing under Shari'a and hindrances to effective Arab securities regulation. It accounts for the major macroeconomic reasons which have enhanced interest in Arab securities markets, examines lack of Arab rules on fraud, insider dealing and possible contractual remedies. It concludes with a case study shedding light on the term ‘securities’ as understood by Article 3 of the 1997 Jordanian Securities Act.

Details

Journal of Financial Regulation and Compliance, vol. 7 no. 2
Type: Research Article
ISSN: 1358-1988

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