There are many ways of dealing with each of the regulatory concerns discussed above. This is reflected in the six reports prepared as part of this project. It is also clearly revealed in a document compiled by the US Commodity Futures Trading Commission (CFTC) entitled "International Regulation of Derivatives Markets: Common Framework Analysis and Cross Regulatory Summary " (1995 edition). This document summarizes the regulatory regimes for derivatives in 17 jurisdictions. It shows that some countries address most of these items with detailed government regulations. Others rely more on self-regulation or government oversight with relatively few specific rules.
Many approaches seem to work well, and an IOSCO report (such as this one) should not recommend any one approach - except to emphasize the importance of making the rules clear to all market participants and to apply them uniformly. The appropriate system for any country depends upon a variety of factors, many of which are specific to that country. These factors include the sophistication of the customers who are using the market, the strength of the nation's financial infrastructure, the degree of international participation in the market, and the legal, social, and cultural environment.
Those entrusted with regulating futures markets have a difficult responsibility. There is no magic or unique road to successful regulation. In large measure the regulators' task is to see that each of the items mentioned above is addressed effectively - either through direct regulation or self-regulation. If regulators can accomplish this, they are well on the way to achieving the three basic goals of market integrity, financial integrity and fair treatment of customers.
