Under FMIA, what is the described approach to regulation?

Under FMIA, what is the described approach to regulation?

• A. Government regulation
• B. International harmonization
• C. Self-regulation
• D. Market monopolization

Answer: (C)

The main idea is that regulation under FMIA is driven by self-regulation within the market, with the supervisory authority providing oversight rather than issuing every rule from above. In practice, market participants, exchanges, clearinghouses, and industry bodies establish and enforce rules through self-regulatory arrangements. The regulator (FINMA) oversees compliance, steps in to ensure minimum standards, and intervenes if needed, but does not micromanage every rule. This setup lets rules evolve quickly with market developments while still keeping a safety net of supervision. The other approaches don’t fit: direct government regulation would imply top-down rules issued by the state for every aspect; international harmonization refers to aligning with other countries’ standards rather than the market-driven rulemaking focus; and market monopolization would contradict the open, competitive intent of a self-regulatory framework.

The main idea is that regulation under FMIA is driven by self-regulation within the market, with the supervisory authority providing oversight rather than issuing every rule from above. In practice, market participants, exchanges, clearinghouses, and industry bodies establish and enforce rules through self-regulatory arrangements. The regulator (FINMA) oversees compliance, steps in to ensure minimum standards, and intervenes if needed, but does not micromanage every rule. This setup lets rules evolve quickly with market developments while still keeping a safety net of supervision.

The other approaches don’t fit: direct government regulation would imply top-down rules issued by the state for every aspect; international harmonization refers to aligning with other countries’ standards rather than the market-driven rulemaking focus; and market monopolization would contradict the open, competitive intent of a self-regulatory framework.