Conflicts of Interest in Self-Regulation : Can Demutualized Exchanges Successfully Manage Them?

Carson, John W.

World Bank, Washington, DC

关键词: SECURITIES MARKETS;    STOCK MARKETS;    CONFLICT OF INTEREST;    CAPITAL MARKETS;    SECURITIES REGULATION;   

DOI  :  10.1596/1813-9450-3183
RP-ID  :  WPS3183

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

The author examines the implications ofdemutualization of financial exchanges for their roles asself-regulatory organizations. Many regulators and exchangesbelieve that conflicts of interest increase when exchangesconvert to for-profit businesses. Demutualization alsochanges the nature of an exchange's regulatory role asbroker-dealers' ownership interests are reduced. Thesefactors are leading to reduced regulatory roles forexchanges in many jurisdictions. The resulting changes havesignificant implications for regulation of financialmarkets, especially as exchanges are the onlyself-regulating organizations (SROs) in most countries.Major changes in the role of exchanges require a rethinkingof the allocation of regulatory functions and the role ofself-regulation, as well as stronger mechanisms to mitigateconflicts of interest. Carson looks at the views of bothexchanges and regulators on these issues in Asian, European,and North American jurisdictions where major exchanges haveconverted to for-profit businesses. He finds that views onthe conflicts of interest faced by demutualized exchangesvary widely. In addition, the tools and processes used byexchanges and regulators to manage conflicts also differsignificantly across jurisdictions. The author concludesthat new and greater conflicts result from demutualizationand canvasses the regulatory responses in the jurisdictions examined.