Regulatory Systemic Risk in US Securities Regulation

Aviv Pichhadze

The concept of regulatory systemic risk - a long-term imbalance, resulting from the misalignment between regulatory initiatives and market realities, that impacts multiple areas of the regulatory framework - is developed in the context of US securities regulation. The discussion offers two theses, one descriptive and the other normative. Descriptively, drawing on institutional approaches to the study of regulation, I show how regulatory systemic risk emerges in the US securities regulatory framework. The issue is examined by looking at section 971, Proxy Access, of the Dodd-Frank Act. Normatively, the discussion highlights the failure of the Dodd-Frank Act to mitigate regulatory systemic risk.

Law and Financial Markets Review, Vol. 5, No. 3, May 2011: 176-182.

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