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Self-Regulation In The Derivatives Markets: Stability Through Collaboration, Heath P. Tarbert
Self-Regulation In The Derivatives Markets: Stability Through Collaboration, Heath P. Tarbert
Northwestern Journal of International Law & Business
Sound financial regulation does not require choosing between governmental and private action. Instead, optimal regulatory solutions often blend the expertise and adaptability of private-sector influence with the stabilizing effects of federal oversight. This collaborative framework has a rich history in U.S. derivatives regulation, which has long relied on self-regulatory organizations (“SROs”) like exchanges, clearinghouses, and the National Futures Association to help promote market stability and customer protection. SROs remain subject to oversight by the Commodity Futures Trading Commission (“CFTC”), which guards against the proverbial fox-in-the-henhouse scenario while advancing quintessential government functions like mitigating systemic risk.
The advantages of this self-regulatory …