Introduction

This chapter examines two influential securities regulatory systems the US regulatory regime and the UK practice. It reveals the role of regulation in improving the efficiency of capital markets. The crash of the securities market triggered the economic crisis known as the Great Depression in the US, which soon swept other industrialized countries. The PCAOB is responsible for setting up rules of self-regulation, and has the authority to discipline accounting firms and auditors including disqualifying accountants and auditors. Self-regulatory institutions including stock exchanges are subject to the administrative intervention of the Securities and Exchange Commission (SEC). For instance, the SEC has the authority to modify policies and regulations adopted by stock exchanges for governing their own operations in the public interest. The UK securities market was mainly under self-regulation through stock exchanges themselves and several self-regulation organizations including the Council of Securities Industry.