A self-regulatory organization (SRO) is an organization that exercises some degree of regulatory authority over an industry or profession. The regulatory authority could exist in place of government regulation, or applied in addition to government regulation. The ability of an SRO to exercise regulatory authority does not necessarily derive from a grant of authority from the government.
>>>PUT SHARE BUTTONS HERE<<<
š Self-regulatory organization in the context of Financial regulation
Financial regulation is a broad set of policies that apply to the financial sector in most jurisdictions, justified by two main features of finance: systemic risk, which implies that the failure of financial firms involves public interest considerations; and information asymmetry, which justifies curbs on freedom of contract in selected areas of financial services, particularly those that involve retail clients and/or principalāagent problems. An integral part of financial regulation is the supervision of designated financial firms and markets by specialized authorities such as securities commissions and bank supervisors.
In some jurisdictions, certain aspects of financial supervision are delegated to self-regulatory organizations. Financial regulation forms one of three legal categories which constitutes the content of financial law, the other two being market practices and case law.
In this Dossier
- ā Core Definition: Self-regulatory organization
- š Self-regulatory organization in the context of Financial regulation
- Self-regulatory organization in the context of Regulation
- Self-regulatory organization in the context of Market failure
- Self-regulatory organization in the context of Self-regulating
Self-regulatory organization in the context of Regulation
Regulation is the management of complex systems according to a set of rules and trends. In systems theory, these types of rules exist in various fields of biology and society, but the term has slightly different meanings according to context. For example:
- in government, typically regulation (or its plural) refers to the delegated legislation which is adopted to enforce primary legislation; including land-use regulation
- in economy: regulatory economics
- in finance: financial regulation
- in business, industry self-regulation occurs through self-regulatory organizations and trade associations which allow industries to set and enforce rules with less government involvement; and,
- in biology, gene regulation and metabolic regulation allow living organisms to adapt to their environment and maintain homeostasis;
- in psychology, self-regulation theory is the study of how individuals regulate their thoughts and behaviors to reach goals.
Self-regulatory organization in the context of Market failure
In neoclassical economics, market failure is a situation in which the allocation of goods and services by a free market is not Pareto efficient, often leading to a net loss of economic value. The first known use of the term by economists was in 1958, but the concept has been traced back to the Victorian writers John Stuart Mill and Henry Sidgwick.Market failures are often associated with public goods, time-inconsistent preferences, information asymmetries, failures of competition, principalāagent problems, externalities, unequal bargaining power, behavioral irrationality (in behavioral economics), and macro-economic failures (such as unemployment and inflation).
The neoclassical school attributes market failures to the interference of self-regulatory organizations, governments or supra-national institutions in a particular market, although this view is criticized by heterodox economists. Economists, especially microeconomists, are often concerned with the causes of market failure and possible means of correction. Such analysis plays an important role in many types of public policy decisions and studies.
Self-regulatory organization in the context of Self-regulating
Self-regulation may refer to:
- Emotional self-regulation
- Self-control, in sociology/psychology
- Self-regulated learning, in educational psychology
- Self-regulation theory (SRT), a system of conscious personal management
- Industry self-regulation, the process of monitoring one's own adherence to industry standards
- Self-regulatory organization, in business and finance
- Homeostasis, a state of steady internal conditions maintained by living things
- Emergence, the phenomenon in which unpredictable outcomes emerge from complex systems
- Self-regulating variable resistance cables used for trace heating
- Spontaneous order