The conceptual basis and limit of self-regulation by securities markets in Nigeria and United States

Abstract

This article examines the background to the concept, as well as the practice of self-regulation by securities markets in Nigeria and the United States,as examples of an emerging and a major securities market respectively,against the background of government oversight that limits self-regulation.The paper discusses the advantages and disadvantages of self-regulation of the securities markets. It observes that though the nature of securities market makes self-regulation inevitable, market manipulation by corporate managers and securities professionals as well as deliberate policy choice pave the way for progressively intense government regulatory oversight of the securities markets in focus. It concludes that if government oversight has become unavoidable, Self-Regulatory Organisations (SROs) should be given the statutory authority to determine the contents of their own rules and to enforce them by civil sanctions while government decides criminal sanctions, where necessary, and monitors the SROs to ensure that they enforce their own rules impartially.