Recursivity in Production of Market Rules: A Case of Regulation NMS

• In Event: 051 - Regular Session. Economic Sociology. Law and Regulation in Economic Life

Abstract

The regulations have played an important role in shaping market structures and constructing behaviors of market participants. This paper examines rule making of the Regulation NMS, arguably the most important and controversial regulation in the financial markets since the 1970s. This paper argues that in the production of the regulation as mandated by law participants of the organizational field showed sharp division. The regulators’ attempts to reconcile the conflicts among regulators themselves and among market participants demonstrate the recursivity of rule making as discussed in other literature. In addition, the incomplete reconciliation of deep division among stakeholders at least partially explains why market participants have repeatedly failed to comply with the regulator’s interpretation and enforcement of the abstract rule have been increasingly technical.

Author

• Bo Hee Min, University of Wisconsin-Madison