Financial Markets and Compliance

This chapter will focus on the goals of financial market regulation through the rules of economics, the strategies financial regulation employs to achieve these goals and the insights this provides for the compliance profession. For an overview of the goals and strategies of financial regulation this chapter will draw on the noteworthy work of John Armour et al. (2016).
In doing so, this chapter makes several important contributions. First, characterizing the goals of financial market regulation through the rules of economics will help compliance professionals to develop focused principles and criteria for assessing the merits of financial market regulation in order to develop a compliance framework. These principles and criteria are connected to the underlying functioning of the financial system, which the regulation is seeking to improve. Secondly, these principles and criteria can be used to assess and gain a deeper understanding of any financial regulation in any jurisdiction and could be used as heuristics. Thirdly, this will enable compliance professionals to escape from the 'silo' approach that disrupt the treatment of financial market regulation.