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Developing a Resilient Securities Market Supervisory Architecture
Preprint   Open access

Developing a Resilient Securities Market Supervisory Architecture

Duong Phuong, Jinghui Liu and Ian Eddie
MDPI
01/06/2026
DOI: https://doi.org/10.20944/preprints202605.2107.v1
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Preprint (Author's original) Open CC BY V4.0

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Abstract

securities market supervision (SMS) 2008 GFC financial regulatory architecture central banks securities commissions self-regulatory organizations (SROs) JEL Classification: G10, G15, G18, G28 self-regulatory organizations (SROs) Banking, finance and investment not elsewhere classified Investment and risk management Financial institutions (incl. banking) Finance services
The paper investigates the impacts of the 2008 Global Financial Crisis (GFC) on securities market supervision (SMS) architecture by identifying how securities regulators have adjusted their supervisory system to reflect the lessons learnt from the GFC, to adapt to the post-GFC market conditions, and ultimately to develop a resilient structure that endures financial crises. Both quantitative and qualitative techniques are employed to generalize the crisis impacts on SMS architecture and analyze the complex crisis-induced policy responses. Key findings include: (i) a worldwide SMS restructuring is undertaken by securities regulators; (ii) Self-regulatory organizations (SROs) faced diminishing roles in market supervision; (iii) Twin-peaks became the customized option for developed markets but not favorable by emerging markets; (iv) Integration was the choice of emerging markets' SMS restructuring, which was accelerated by 1997 Asian financial crisis and further fueled by the GFC; and (v) It is a new era for central banks to become prudential regulators in the twin-peaks model and integrated supervisors of financial markets. Regulatory implications are drawn for emerging markets to solve the dilemma of supervisory restructuring and the role of SROs post-GFC to set up an architecture that endures financial crises. This study makes contribution to the investigation and explanation regarding the convergence by securities markets in their post-GFC SMS architecture policy reforms as well as the reasons for the convergence and different ways of policy making. It also provides recommendations for post-GFC SMS restructuring emerging markets in the context of current policy debates focused on the reforms in developed economies.

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