Securities Market Regulation: Experiential Analysis And Theory Frame

Of Securities Market Regulation: Experiential Analysis and Theory FrameBy a comprehensive view of all countries' economic development history and actuality, we can find that because of the particularities of securities and the important status of securities economy in national economy, every country which ever had securities markets existed government regulation on it. In theory, there are lest controversies about regulation on securities markets-as Stigler said: above all public regulations on economic activity, the regulation of securities markets by the Securities and Exchange Commission were praised most. But existing regulation theory or doctrine in economics is almost about common goods, researches in economics about the regulation of securities market are still at the beginning.It is special goods that exchanging in securities markets-securities. Compare with common goods, securities have some characteristics as common goods have, but they also have some different important characteristics. So while we theorize securities market regulation, we should absorb the research achievements in common regulation theory, and we should begin from the particularities of securities and securities market, in order to find a proper theory instrument to direct our practice of securities markets regulation.In all economic theories of regulation, three of them are more mature and more popular than others, it include 'The Public Interest Theory of Regulation'; 'The Capture Theory of Regulation' and 'The New Economic Theory of Regulation'. Through theory analyzing and comparing, we can make a good foundations of establishing theories about securities market regulation.As we say before, securities are special goods. First, as 'Credence items', it is hard to know what the standard of quality and performance was even after the outcome is known. That will bring on bad information asymmetries and principal-agent problems. Second, the dummy characteristic of securities and the information determining of securities value will induce the uncertainty of securities value, so the risk of securities is bigger than common goods. Third, by standardized design, it is easy to segment securities and securities can move separating from real assets, all these make the liquidity and centrality of securities exchange become much higher, especially assisting by information technology, the externalities of securities will be stronger. In a word, the securities markets will be easier to bring 'market failure' than common markets, andregulation is more necessary in securities market. The securities market failure and its damage of economic efficiency bring the necessity of public regulation on securities market, but just as other regulations, securities regulation is not all-powerful. We need spend high costs in regulation and there are many rent-seeking activities on securities market, and there exist the tendency of over-regulation. As there is securities market failures, there are securities regulation failures too. We should abide the rule of prudential regulations.Though there are few disputes about the necessity of public regulation on securities market, but because of the difference in economy, politics, legal form, financial systems, culture and tradition, every country has its special securities market regulation institutions, and the evolvement is still ongoing. Though there is no uniform regulation mode that can fit all countries' need, it is beneficial for improve the degree of Chinese securities market regulation by use west mature countries or other emerging markets' experience for reference.Securities market regulation is a practical and operational task, social history evolvement in politics, economy, culture and other aspect lead the change of institutions of securities market regulation. The transition of securities market institution is much remarkable in near 30 years. Because of the changes of Regulation environments, information technology improvements, innovations and globalization of world economy and fin...