Self-Regulation Stock Exchanges - SS2 Accounting Lesson Note

Self-regulation by stock exchanges refers to a system where the exchange sets and enforces its own rules and regulations to ensure that its members and listed companies operate in a responsible and ethical manner. 

This system is designed to promote transparency, fairness, and integrity in the marketplace, and to protect investors from fraud, manipulation, and other forms of misconduct.

Under a self-regulatory system, stock exchanges typically have the authority to set their own listing standards, trading rules, and disciplinary procedures. They may also have the power to investigate and sanction members and companies that violate their rules or engage in other forms of misconduct.

Self-regulation allows for greater flexibility and responsiveness than traditional government regulation. This is because the exchange is better positioned to understand the needs and challenges of the market, and can respond more quickly to changes in the regulatory environment.