Castle in the Air or Actual Fortress? The Sustaining of Private Regulatory Institutions in the Dutch Securities Sector

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Private regulatory institutions refer to a set of rules that firms across an industry collectively and voluntarily agree to adhere to. The goal of participation in private regulatory institutions is to communicate superiority over non-participating competitors, gain legitimacy among key market and nonmarket stakeholders and benefit from the consequent reputational benefits, improved financial performance and/or lack of coercive government intervention and adverse stakeholder actions. It is however still unclear how these institutions are strategically maintained over time. Through a longitudinal, qualitative analysis of news articles, official government records and other documents related to DSI, the self-regulatory organisation in the Dutch securities sector, I have found that, contrary to what has been previously theorised, private regulatory institutions can be sustained through fortifying actions alone, rather than through a combination of hollowing and fortifying actions. The findings also challenge the common assumption that industry pressures always lead to fewer commitments and weaker enforcement of private regulatory institutions. Lastly, the results also suggest a difference between stakeholders in their effectiveness to affect self-regulatory institutions. The findings of this study can help decision-makers design (self-)regulatory solutions for emerging technologies in the financial sector.
Faculteit der Managementwetenschappen