Table Of ContentLCF Studies in Commercial and Financial Law 3
Antonio Marcacci
Transnational
Securities
Regulation
How it Works, Who Shapes it
LCF
The London Centre for Commercial and Financial Law
LCF Studies in Commercial and Financial Law
Volume 3
SeriesEditors
MadsAndenasQC,UniversityofOslo,Oslo,Norway
MarenHeidemann,TheLondonCentreforCommercialandFinancialLaw,
London,UK
AdvisoryEditors
GuidoAlpa,UniversityofRome“LaSapienza”,Rome,Italy
FreyaBaetens,UniversityofOsloandUniversityofOxf,Oxford,UK
OlhaCherednychenko,UniversityofGroningen,Groningen,TheNetherlands
IrisH.-Y.Chiu,UniversityCollege,UniversityofLondon,London,UK
PaulCraig,UniversityofOxford,Oxford,UK
JanH.Dalhuisen,UniversityofCalifornia,Berkeley,andCatólicaLisbon,
UniversityofPortugal,Lisbon,Portugal
EttoreLombardi,UniversityofFlorence,Florence,Italy
MichelePapa,UniversityofFlorence,Florence,Italy
MichaelSchillig,King’sCollege,UniversityofLondon,London,UK
The aim of the series is to provide a forum to discuss specifically commercial law
subjectsfocussingontheneedsofmerchants,theiradvisersandclients.Topicscover
all areas of national, international and transnational commercial law broadly con-
ceived and including issues in corporate law and financial law taken from both
private and public regulatory law, private international law, international commer-
cialarbitration,investor-statedisputesettlementandinternationaltaxlaw.Theseries
showcasesresearchcarriedoutbytheLondonCentreforCommercialandFinancial
Law (LCF) and its affiliated researchers and authors. The editors further invite
proposals especially welcoming novel theories including on non-state law or on
newtechnologiesandtheirtreatmentinthelawsuchas“artificialintelligence”and
the digital economy as well as issues of sustainability and ecological reforms.
Furtherdetailscanbefoundonwww.lcf-academic.org.
Antonio Marcacci
Transnational Securities
Regulation
How it Works, Who Shapes it
AntonioMarcacci
Munich,Germany
ISSN2731-6602 ISSN2731-6610 (electronic)
LCFStudiesinCommercialandFinancialLaw
ISBN978-3-031-18062-0 ISBN978-3-031-18063-7 (eBook)
https://doi.org/10.1007/978-3-031-18063-7
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Foreword
Transnational securities regulation has become the guarantor for effective and
sustainable global financial markets, including the regulation of risk. The 2008
financial crisis has been a strong driving force, and so is, increasingly, the climate
crisis.Amonographofthekeystandard-setterattheinternationallevel—IOSCO—
hasbeenmissing.IOSCO iswellknowntotheinsiders offinancialmarketregula-
tion, but its concrete governance, working mechanisms, role in the new post-crisis
international financial architecture, and impact on cross-border enforcement have
not been analyzed in a comprehensive and contextual way. Dr. Antonio Marcacci
fills this gap, and he does so in an excellent manner. He analyzes the operational
structure of IOSCO, what he terms its minilateral1 governance, key aspects of its
continuing work program, standard-making, accountability, legitimacy, and imple-
mentationalongsidetheavailablesanctionsmechanisms.Dr.Marcacci’smonograph
isthemostcomprehensivelegalanalysisonIOSCOsofar.
Dr. Marcacci argues that while the United States had dominated IOSCO until
2008, the European Union has emerged as a second regulatory power, and, he
explains, this is shifting IOSCO’s internal balance from unipolarity to bipolarity.
Theso-calledBrusselseffecthasbeenwellknownandsubjectofstudyinpolitical
science and legal literature for quite some time. The EU, because of the size of its
marketandthebuyingpowerofitscitizens,isabletoimposeitshigherstandardson
therestoftheworld.
ResearchontheroleoftheUSandEUintransnationalsecuritiesregulationhas
beenmissing,beyondanumberofstudiesfocusingontheimpactofUSregulators.
Dr. Marcacci’s book fills this other significant gap. The monograph examines
specific fields of IOSCO regulatory production or output, from the fundamental
objectives and principles of securities regulation to more complex topics such as
insider trading, retail investor protection, credit rating agencies, financial bench-
marks, and derivatives. He reviews the role and influence of the US and EU
1SeeNote315,Chap.2.
v
vi Foreword
regulatory authorities on the content of IOSCO standards, and also the impact the
otherway,oftheIOSCOimpactonUSandEUregulatorychoices.Supportedbya
substantial amount of valuable research, including interviews with the Organiza-
tion’sseniormanagement,Dr.MarcaccishowstheemergenceoftheEUasaglobal
regulatorypowerabletoinfluenceIOSCO’snormativeproduction.Significantly,as
pointed out in the last chapter, the EU’s standing in the transnational regulatory
arenaisyettoconsolidateand,asDr.Marcaccisuggests,thecurrentdecade might
witnessIOSCOmovetowardswhathetermsminipolarity.
Dr. Marcacci’s book provides an original and interesting examination of a
difficult subject that has received too little previous examination and certainly not
inthisdepthanddetail.Thequalityofthisbookwillpromotenecessaryandtimely
debate and discussion. Dr. Marcacci’s book provides a most useful contribution to
academicstudyontheinternationalsecuritiesandcapitalmarkets.Itisalsoamust-
read not only for those involved in transnational securities regulation but also for
those interested in the “Brussels effect” and the emergence of the EU as a global
regulatoryplayeringeneral.
FacultyofLaw,UniversityofOslo, MadsAndenas
Oslo,Norway
InstituteofAdvancedLegalStudies,
SchoolofAdvancedStudy,University
ofLondon,London,UK
Acknowledgements
I would like to express my deepest gratitude to Mads Andenas and Maren
Heidemann for accepting my book in their Series. It is a profound honor, and I
could not think of any better location for my monograph. I see this chance as an
encouragement for further advancement and intellectual commitment. My sincere
gratitude also goes to the anonymous reviewers for their precious suggestions and
insightfulcomments.
MyprofoundgratitudegoestotheIOSCOpersonnelfortheirkindavailabilityin
the formal interviews and informal discussions held online in 2021 and for the
in-person meeting held in Madrid in January 2022. In particular, I would like to
personally thank Tajinder Singh, Deputy Secretary General and Acting Secretary
General of IOSCO from January through September 2021; Isabel Pastor, Head of
Enforcement&Cooperation;RalucaTircoci-Craciun,HeadofGrowthandEmerg-
ing Markets and Implementation Monitoring; Jonathan Bravo, Head of Finance;
CeciledeWit,SeniorAdvisorforCapacityBuildingPolicyandPrograms;andAlp
Eroglu,SeniorPolicyAdvisor.SpecialthanksgotoSilviaMoroni,HRManagerand
Executive Assistant to the Deputy Secretary General, for her kind availability and
assistance. Importantly, no opinion or reflection expressed in the book can be
referredtotheIOSCOstaff,towhomonlythatinformationasexplicitlymentioned
inspecificfootnotescanbeattributed.
Iwishtowarmlythankallprivate-sectorinternationalexpertsIhadtheprivilege
todiscusswithaboutthefutureoftransnationalfinancialregulation:CarloComporti
from Paris, Ross Delston from Washington, DC, Scott Morris from Copenhagen,
Kathrin Rauschnabel from New York, Massimo Scolari from Milan, and Kevin
TaylorfromLondon.Importantly,noopinionorreflectionexpressedinthebookcan
be referred to the interviewees, to whom only that information as explicitly men-
tionedinspecificfootnotescanbeattributed.
WordscanhardlyexpressmygratitudetoLuciaQuagliafromBolognaUniver-
sity for her generous availability in discussing global standards on derivatives and
the input coming from the EU and the US. My sincere gratitude goes to Giulia
Claudia Leonelli from the Birkbeck University of London for her precious and
vii
viii Acknowledgements
guidingcommentsontransnationallaw,andMauriziaDeBellisfromtheUniversity
of Rome Tor Vergata for sharing bibliographic recommendations. I warmly thank
my fellow EUI alumni Eugenio Cusumano from the University of Messina for his
suggestionsonsomeaspectsofpoliticalscienceandMartaCanteroGamitofromthe
UniversityofTartuforhelpingmewithSpanishlaw.Ofcourse,allmistakesaremy
own.Lastbutdefinitelynotleast,IwouldliketothankSumuduAtapattufromthe
University of Wisconsin Law School and Valentina Spiga, Law Information Spe-
cialist at the EUI Library, for their kind and useful publication tips; and Nicola
Hargreaves, EUI Language Centre Coordinator, for her precious language
suggestions.
My heartfelt thanks go to my legal and compliance colleagues Lily Teo from
SingaporefortheusefuldiscussionsabouttheextraterritorialeffectsofEUlawand
TerryXiafromShanghaiforbrainstormingwithmeonChinesefinancialregulation.
AspecialthanksgoestoSilviaMellofromMilanandChiaraCassaràfromFlorence
fordiscussingwithmeaboutretailinvestorprotection.Likewise,Iwouldliketotake
thisopportunitytoexpressmygenuineappreciationtomyMunich-basedcolleagues
KatjaBaumann,ChristianGröhe,StefanieHaberhauer,PhilippMüller,andMarkus
Schwaiger,fortheirfriendshipandprofessionalism.
Thisbookisdedicatedtomyfamily,initsmostencompassingmeaning.
March2022
Munich,Germany AntonioMarcacci
Contents
1 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 ResearchQuestions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 ScopeandDefinitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.2.1 SecuritiesRegulationintheUnitedStates. . . . . . . . . . 5
1.2.2 SecuritiesRegulationintheEuropeanUnion. . . . . . . . 8
1.2.3 SecuritiesRegulation. . . . . . . . . . . . . . . . . . . . . . . . . 10
1.2.4 TransnationalLawandRegulation. . . . .. . . . .. . . . .. 12
1.2.5 TransnationalSecuritiesRegulation. . . . . . . . . . . . . . . 17
1.3 Structure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
1.4 Methodology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
PartI TransnationalSecuritiesRegulation:HowItWorks
2 IOSCO:Evolution,Nature,andGovernance. . .. . . . . . . . . . . . .. . 33
2.1 OriginandEvolutionoftheGlobalStandard-Setterfor
SecuritiesRegulation:IOSCO. . . . . . . . . . . . . . . . . . . . . . . . . 34
2.2 TheParticularlyUnorthodoxLegalNatureofIOSCO. . . . . . . . 38
2.3 Goals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
2.4 Powers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
2.5 Membership:PublicRegulatorsandPrivateActors. . . . . . . . . . 45
2.6 RegulatoryDevices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
2.7 InternalBodies:TheirEvolutionandMeaning. . . . . . . . . . . . . 48
2.7.1 PresidentsCommittee. . . . . . . . . . . . . . . . . . . . . . . . . 48
2.7.2 ExecutiveCommitteeandTechnicalCommittee. . . . . . 50
2.7.3 TheCommitteeforEmergingMarkets. . . . . . . . . . . . . 51
2.7.4 RegionalCommittees. . . . . . . . . . . . . . . . . . . . . . . . . 52
2.7.5 TheCommitteeofSelf-RegulatoryOrganizations/
AffiliateMembersConsultativeCommittee. . . . . . . . . 53
ix
