Effectiveness of the Capital Market Regulatory System in Iran from the Perspective of Good Regulation
Keywords:
Effectivenesss, good regulation, capital market, corrective instruments, supervisory instrumentAbstract
The capital market, as one of the key pillars of the financial system, plays a fundamental role in mobilizing resources, directing savings toward productive investments, and achieving sustainable economic growth. The efficient and effective functioning of this market largely depends on the existence of an appropriate, efficient, and accountable regulatory system. In this regard, examining the effectiveness of the capital market regulation system in Iran from the perspective of good regulation is of particular importance. This article, using an analytical and descriptive method, seeks to examine the level and manner of access of Iran’s capital market regulatory system to effective, efficient, and appropriate instruments through which regulatory objectives—namely stability, transparency, and competition—are achieved. The findings of this study indicate that, from the perspective of good regulation, in addition to the independence, participatory capacity, and accountability of the regulatory authority, the success of the regulatory system depends on access to a broad range of instruments and powers. These can be categorized into two groups: “behavior-corrective instruments,” including pricing instruments, standard-setting, quality assurance, and competition safeguards; and “control and supervisory instruments,” including entry and exit control of market participants, oversight of proper enforcement of regulations, dispute resolution, and complaint handling. In regulating Iran’s capital market, it can be stated that despite the granting of a wide range of powers and the availability of a substantial volume of necessary instruments— which may be considered the fundamental capacity and potential for the effectiveness of the regulatory system—this system has not been successful, effective, or efficient in achieving regulatory objectives. This shortcoming is due to the absence of a comprehensive, precise, and up-to-date legal framework, as well as insufficient attention to the organic interconnection of the principles of good regulation in the process of achieving regulatory goals.
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Copyright (c) 2025 Mohammadreza Hosinkhan Gandahari (Author); Haneh Farkish; Arkan Sharifi (Author)
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