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A modest proposal: Right-sizing exchange immunity
The US securities industry is governed by three regimes: federal disclosure rules, state laws and self-regulatory organisations. The self-regulatory scheme is the result of an 80-year-old compromise conceived during the height of the Great Depression. While today’s industry is unrecognisable from that time, the self-regulatory rules remain nearly unchanged. Specifically, the US exchanges — sanctioned as self-regulatory organisations with immunity from private damages suits — evolved from mutually-owned utilities to for-profit enterprises. At the same time, alternative trading systems now execute significant trading volumes outside the traditional exchange venues. Despite these and other developments, the self-regulatory regime remains almost entirely unchanged from its inception. This paper discusses important facets of the US self-regulation debate.
The full article is available to subscribers to the journal.
Zachary J. Flati studied at the University of San Diego School of Law. In addition to serving as the San Diego Journal of Climate & Energy Law’s Editor-in-Chief, Mr Flati authored a number of articles regarding topics such as NAFTA, bankruptcy and corporate law. Mr Flati worked with corporate law firms and a number of federal regulators, including the US Securities and Exchange Commission and the US Attorneys’ Office.