Governance of Securities Regulators : A Framework

This paper reviews the published work on the governance of regulatory authorities in order to identify the basic governance standards that apply and some of the factors that affect the implementation of good governance. There are four pillars of good regulatory governance: independence, accountability, transparency, and integrity. The regulator should be operationally independent from commercial and political influences in the exercise of its functions and powers. Accountability is the means whereby a regulatory authority is held responsible for the actions it takes. Transparency refers to the publication of relevant information designed to demonstrate consistency and openness. The fourth governance pillar, integrity, refers to the internal processes that the authority adopts to ensure there is discipline and consistency in its operations and to limit the risks of regulatory staff acting in their own self-interest as opposed to that of the authority and the market. These four elements are mutually reinforcing, in that accountability is necessary to provide legitimacy to independence, transparency is necessary to demonstrate that independence does not lead to abuse or improper behavior, and integrity is necessary to provide the discipline to control the exercise of independent powers. Available evidence suggests that independence and accountability are far from being universally applied in practice. The paper concludes with some practical suggestions that experience indicates are likely to enhance the effectiveness of the governance of securities regulators. Good governance of the securities regulator is necessary for effective regulation. It is also of importance in setting an example to encourage good corporate governance in the private sector.

Bibliographic Details

Main Authors:	Pratt, Richard, Berg, Alexander
Language:	English en_US
Published:	World Bank, Washington, DC 2014-03
Subjects:	ABUSE, ACCOUNTABILITY, ACCOUNTABILITY ARRANGEMENTS, ACCOUNTABILITY MECHANISMS, ACCOUNTING, ACTIVE MARKET, ADMINISTRATIVE SANCTIONS, ALLOCATION OF RESPONSIBILITIES, AMENDMENT, ATTORNEY GENERAL, AUDIT COMMITTEE, AUDITOR, AUTONOMOUS AGENCY, BANK POLICY, BANK SUPERVISION, BANK SUPERVISORS, BARRIER, BOARD MEETING, BOARD MEETINGS, BOARD MEMBER, BOARD MEMBERS, BOND, BRIBERY, BRIBES, BROKERS, CAPITAL ALLOCATION, CAPITAL MARKETS, CENTRAL BANK, CENTRAL BANK INDEPENDENCE, CENTRAL BANKS, CHECKS, CIVIL SERVANT, CODE OF ETHICS, CODES OF CONDUCT, COLLECTIVE RESPONSIBILITY, COMMON LAW, COMPETITOR, COMPLAINTS, CONFIDENCE, CONFIDENTIALITY, CONFLICT OF INTEREST, CONFLICTS OF INTEREST, CONSENSUS, CONSTITUTION, CONSULTATION, CORPORATE GOVERNANCE, CORRUPTION, CREDITORS, CRIMINAL, CRIMINAL SANCTION, DECISION MAKING, DISCLOSURE, DISCLOSURE DOCUMENTS, DISCRETION, DRAFT REGULATIONS, ECONOMIC COOPERATION, ECONOMIC DEVELOPMENT, ECONOMIC GROWTH, EFFICIENT MARKETS, EMERGING MARKETS, ENFORCEMENT ACTION, ENFORCEMENT POWERS, ENFORCEMENT PROCEDURES, EQUITY MARKETS, EXCHANGE COMMISSION, EXPENDITURE, FINANCIAL CRISIS, FINANCIAL INSTITUTIONS, FINANCIAL MANAGEMENT, FINANCIAL MARKET, FINANCIAL MARKETS, FINANCIAL SECTOR, FINANCIAL SERVICES, FINANCIAL STABILITY, FINANCIAL SYSTEM, FINANCIAL SYSTEM STABILITY, FORM OF TAX, GOOD GOVERNANCE, GOVERNANCE ISSUES, GOVERNANCE PRACTICE, GOVERNANCE PRACTICES, GOVERNANCE STANDARDS, GOVERNMENT AGENCIES, GOVERNMENT AUTHORITY, GOVERNMENT BONDS, GOVERNMENT DEPARTMENT, GOVERNMENT FUNDING, GOVERNMENT FUNDS, GOVERNMENT MINISTRIES, GOVERNMENT OFFICIALS, GOVERNMENT POLICY, HOUSE OF COMMONS, INCOME, INDIVIDUAL MARKET, INFORMATION SHARING, INTEGRITY, INTERNAL CONTROLS, INTERNATIONAL BANK, INTERNATIONAL BEST PRACTICE, INTERNATIONAL FINANCIAL MARKETS, INTERNATIONAL SETTLEMENTS, INTERNATIONAL STANDARDS, INVESTIGATION, INVESTIGATIONS, INVESTOR PROTECTION, JUDICIAL REVIEW, JUDICIAL SYSTEM, JUDICIARY, JURISDICTION, JURISDICTIONS, LAWS, LEGAL ADVICE, LEGAL PROTECTION, LEGAL TRADITIONS, LEGISLATION, LEGISLATIVE REQUIREMENTS, LEGISLATURE, LEGITIMACY, LIABILITY, MARKET INTERMEDIARIES, MARKET LEVELS, MARKET PARTICIPANT, MARKET PARTICIPANTS, MARKET PRACTICE, MARKET PRICE, MARKET REGULATOR, MINISTER, MINISTER OF FINANCE, MINISTERS, MINISTRY OF FINANCE, MONETARY FUND, MONETARY POLICY, OPERATIONAL INDEPENDENCE, OPERATIONAL PROCESSES, OUTPUT, OVERSEAS TERRITORIES, PENSION, PENSION FUNDS, POLICY OBJECTIVES, POLITICAL ECONOMY, POLITICAL INTERFERENCE, POLITICIANS, PRIVATE SECTOR DEVELOPMENT, PROFESSIONAL ASSOCIATIONS, PROSECUTION, PROSECUTOR, PROTECTION OF INVESTORS, PUBLIC ACCOUNTABILITY, PUBLIC AGENCIES, PUBLIC ASSETS, PUBLIC COMPANIES, PUBLIC INTEREST, PUBLIC SECTOR, QUALITY REGULATION, REGISTRAR, REGISTRATION FEES, REGULATOR, REGULATORS, REGULATORY AGENCIES, REGULATORY AGENCY, REGULATORY APPROACH, REGULATORY AUTHORITIES, REGULATORY AUTHORITY, REGULATORY BODIES, REGULATORY COMMUNITY, REGULATORY DECISION, REGULATORY DECISIONS, REGULATORY GOVERNANCE, REGULATORY MEASURES, REGULATORY OFFICIALS, REGULATORY POLICIES, REGULATORY POLICY, REGULATORY PROCESS, REGULATORY PROCESSES, REGULATORY REFORM, REGULATORY REQUIREMENTS, REGULATORY RESPONSIBILITIES, REGULATORY STANDARDS, REPRESENTATIVES, REPUTATION, RISK FACTORS, RISK MANAGEMENT, RISK MANAGEMENT COMMITTEE, SANCTION, SECURITIES, SECURITIES MARKET, SECURITIES MARKETS, SECURITIES REGULATION, SECURITIES REGULATOR, SECURITIES REGULATORS, SECURITIES REGULATORY AUTHORITIES, SECURITIES REGULATORY AUTHORITY, SHAREHOLDERS, SMALL COUNTRIES, STATE-OWNED ENTERPRISES, SUPERVISORY AGENCIES, SUPERVISORY BOARD, TRANSPARENCY, WHISTLE BLOWING, WHISTLE-BLOWERS, WITHDRAWAL,
Online Access:	http://documents.worldbank.org/curated/en/2014/03/19222443/governance-securities-regulators-framework https://hdl.handle.net/10986/17298
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