The Scope and Jurisprudence of the Investment Management Regulation

Abstract

This Essay reviews three periods of investment company regulation by the Securities and Exchange Commission. It focuses on the period of 1975 to 2000 in which the Commission granted exemptions on conditions, thus deregulating and reregulating, case by case and finally codifying the exemptions in an exemptive rule. The Essay analyses this form of rule-making and compares it to prosecution, settlements, and initial rule-making that typifies the recent years. The Essay concludes that the common law method of legislation, especially when it involves a "bargain" between the regulators and law-abiding regulated institutions who wish to innovate, is likely to lead to optimal rules, provided the conditions (re-regulation) are rigorously enforced.