Between shifts and continuum in cooperation: The international securities regulatory regime and its gradual evolution

Abstract

The gradual reform of the international financial architecture has markedly accelerated as a result of the global financial crisis (GFC). This chapter discusses structural developments at the international level regarding the regulation of securities markets as one of the sectors of financial regulation. It examines the changing dynamics shaping the international securities regulatory regime and how post-crisis developments are affecting its governance and policy-making processes, highlighting both shifts and continuum in cooperation. The focus is on the International Organization of Securities Commissions (IOSCO) as the recognised global standard-setter for securities regulation and the leading policy forum for securities regulators. Throughout the past decade, the Organisation, comprising governmental regulatory bodies from some 115 jurisdictions, including those of the G-20, has endorsed two subsequent strategic direction reviews. It has undergone important institutional reforms and is working intensively with the G-20 and the Financial Stability Board (FSB) on the global regulatory agenda. The chapter’s original analysis and discussion of how IOSCO currently fares against some selected governance norms proposed in the scholarly literature suggests that institutional inclusiveness and regime effectiveness are complementary and potentially reinforcing. However, it also shows that clarity of function and sharp focus are other necessary elements for regime effectiveness.