
Supreme Risk for FINRA and Other SROs
Most efforts to manage systemic risk tend to focus on risks arising from within financial markets, from existing regulators, or from legislative misadventures. Yet self-regulatory organizations (SROs) and the markets that depend on their steady functioning now face an underappreciated risk: that the post-Trump era U.S. Supreme Court will render a market-destabilizing decision in the foreseeable future. Little thought has been devoted to a response should the Supreme Court obliterate a financial market utility or void some critical SRO rule, causing capital markets to freeze up from legal uncertainty.
For many years, these types of scenarios would have been entirely … Read more