Securities Market Integration in Asia: What Would Be the Theoretical Approach?

By Zahid, Md Anowar; Ali, Hasani Mohd | Suffolk University Law Review, Fall 2011 | Go to article overview
Save to active project

Securities Market Integration in Asia: What Would Be the Theoretical Approach?


Zahid, Md Anowar, Ali, Hasani Mohd, Suffolk University Law Review


I. INTRODUCTION

Today, securities offerings and trading have become, to a remarkable extent, global in the same vein as other economic and business activities. The globalization is taking place mainly through integration of national securities markets. The principal examples of such integrated markets are the European union (EU) and the Multijurisdictional Disclosure System (MJDS) between Canada and the united States. Recently, the Association of Southeast Asian Nations (ASEAN) initiated an attempt to integrate securities markets in Asia. This paper will go over the integration efforts of these three regions to see what theoretical approaches they have taken towards their goal.

Integration between different nations is not an easy task because they are politically, economically, and legally divided and diverse. A look into the theoretical perspective will describe how integration has been achieved despite these diversities. As integration has already successfully taken place in Europe and North America, their approaches will be examined first. After that, this paper will evaluate the ASEAN approach to determine if it is following the same line of theoretical construction to achieve its goal. (2)

II. INTEGRATION IN EUROPE

A. Background

The EU of today is a supranational organization that has integrated the economic, political, security, domestic, and justice regimes of twenty-five European states. (3) Its origin lies in three organizations: the European Coal and Steel community (EcSc), the European Atomic Energy community (Euratom), and the European Economic Community (EEC). The ECSC was formed by treaty in 1951 to integrate the coal and steel market in Europe and brought together six states including France and Germany, the two bitter enemies of the Second World War. With this act, Europe started its journey as a community, "basically as an economic organisation, although the final objectives were clearly political." (4) The other two organizations, Euratom and the EEC, followed in 1957 under two different treaties. (5)

Of the above institutions, the EEC (hereinafter EC) was the leading one. (6) Its goal was economic integration and political cohesion. (7) The economic development "was always planned with grander aspirations," (8) because, for some theorists, economic integration "inevitably begets political integration too, even without any explicit initiatives directed at the political sector." (9)

The promoters of the EC envisioned a twofold means of achieving these goals: establishment of a common market and progressive harmonization of economic policies among the member states. Indeed, economic success as a goal and a common market as a means to reach that goal received prominence in EC propaganda and activities. (10) The common market, in this context, promoted four unfettered freedoms (11): namely the free movement of goods, (12) persons, (13) services, (14) and capital (15) under equal conditions of competition. (16) To facilitate their movement, the EC adopted a combined approach--harmonization of some rules and standards and mutual recognition of member states' domestic regimes. The reason behind this approach was that harmonization alone would not be an effective method of integration because detailing technical specifications would be time-consuming, "overregulatory," (17) and probably impossible given the diversity of the legal, administrative, and regulatory systems of the member states. (18) Conversely, resorting to mutual recognition alone would not be sufficient, either, because of the increasing size of the competitive market of Europe.

However, it is not easy to achieve the combined approach in practice. Member states, with a variety of diversities, have different legal and administrative requirements. (19) For example, they have varying standards for products, qualifications for professionals, and regulations for services. These differing requirements stand in the way of the four freedoms.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited article

Securities Market Integration in Asia: What Would Be the Theoretical Approach?
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?