Educating investors and regulators requires more than a mere regulatory regime, and speaks to the very heart of some central problems in development. Still, though, a regulatory framework is indispensable. Some Possible Regulatory Solutions One of the major problems of the Shanghai Stock Exchange is that officials were reluctant to enforce regulations for fear of losing business to other Chinese exchanges. The revisions to Thailand's Stock Exchange Act were explicitly aimed at enhancing its regulatory framework, and the revisions included guidelines on management, prohibited activities, antifraud provisions, and various procedural regulations that clarified a tricky market. In Botswana, legislative reform has tackled qualifications for adequate capital for listing, international supervision, secrecy rules, settlement of disputes, and electronic transfer of funds, all necessary tools for a market.
Some goals are more easily achievable through regulatory fiat.
Of course, there needs to be some agency to make those sorts of decisions, and that is another area where a regulatory framework can assist. Malaysia, another relatively young securities market, maintains a strong and nominally independent Securities Commission. While that may work well in a relatively politically stable country, the idea of a strong central Commission in a country like Cambodia raises the important question of who could be trusted to operate the Commission impartially. Again, a possible solution can be found in Botswana. As much as local government officials might rile at allowing foreigners to oversee their operations, the idea has its appeal, since major accounting firms are presumably impartial, and have little stake in local political disputes.