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2.1.3.self-regulatory body(e.g. the u.s. national association of securities dealers of the Korean Securities Dealers Association) adopts rules and codes of conduct applicable to its members imposes sanctions, fines and can suspend or terminate its members for violations of its rules and other misconduct in the u.s., brokers-dealers who do not belong to and exchange will have the NASD as their the primary regulatory
2.1.4.allocation of oversight, surveillance and enforcement responsibilities among the regulator, the exchanges and self-regulatory body may be handled differently by different jurisdictions-depending on their own requirements. The HK government, for example, has recently recommended moving certain responsibilities currently performed by the exchanges to the SFC
2.2.other parties who play a role in regulation of the financial markets
2.2.1.financial intermediaries play an important role in the financial markets through self-regulation. This will be discussed shortly
2.2.2.investors, particularly institutional investors, play an important role in regulation of the financial markets institutional investors'' participation promotes deeper markets and more liquity the involvement of institutional investors acts as a powerful incentive to other market participants, including the regulator and exchanges, to be sensitive to institutional investors'' concerns and needs institutional investors avoid or reduce their activity in markets where there is significant market misconduct, e.g., manipulation and insider trading, or where the level of disclosure on listed companies is inadequate or inaccurate also, if an institutional investor is concerned about the financial soundness of a financial intermediary, the quality of its services or misconduct, the institutional investor will move its business to another intermediary
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