Document Type : Article
Assistant Prof., Department of Public Law, Faculty of Law and Political Science, University of Tehran, Tehran, Iran
Ph.D. Student in Public Law, Alborz Campus, University of Tehran, Tehran, Iran
According to Article 31 of the the Monetary and Banking Law of Iran, banks may only be incorporated as public joint-stock companies with registered shares. Moreover, according to Article 36 of the Law on Permanent Provisions of Economic, Social and Cultural Development Programs, all public joint-stock companies are required to register with the Iranian Security and Exchange Organization (SEO) as the custodian and supervisor of the capital markets. Thus, establishment of any banks requires initial public offering of banks' shares and conducting secondary transactions needs registration at Tehran Stock Exchange or Iran FaraBourse Co. (IFB). Consequently, all banks are necessarily considered issuers of securities and therefore they are under the supervision of the SEO and subject to the regulations approved by the Securities & Exchange High Council and the rules set by the relevant stock exchange. The purpose of this paper is to examine the institutions that oversee the capital market, the scope of their powers and how they monitor banks, and their compliance with the principles of public law, including transparency and efficiency. To this end, after examining the issue from the perspective of monitoring securities transactions, disclosure of information and corporate governance as three main areas of bank supervision, the study’s findings suggest that the oversight of the banks by the capital market supervisory institutions, leads to transparency in the performance of banks and the protection of of investors interests. However, due to the overlapping jurisdiction of the regulators of the money market and the capital market over banks, in some cases oversight can disrupt the banks efficiency.
- A) Articles
- Bagheri, Mahmoud; Mozaffari, Mostafa & Sadeghi, Mohammad (2016), "Regulating The International Markets of the Exchange: From Regulation of Securities Transactions to Legal Regulation of Accounting Standards", Quarterly Journal of the Stock Exchange, No. 36, pp. 5-27 (In Persian).
- Fama, Eugene F (1969), "Efficient Capital Markets: A Review of Theory and Empirical Work", The Journal of Finance, Vol. 25, No. 2, Papers and Proceedings of the Twenty-Eighth Annual Meeting of the American Finance Association, New York, N.Y. pp. 383-417.
- Famulsky, Tomasz (2017), "Economic Efficiency in Economic Analysis of Law", Journal of Finance and Financial Law, Vol. 3, No.15, Pp. 27–39.
- Gorji Azandiani& Akbar, Ali (2011), "The Ten Commandments of Public Law: Reflection on the Main Concepts", Quarterly Journal of Private Law Studies, Vol. 41, No. 2, pp. 205-223 (In Persian).
- IMF (1999), "Code of Good Practices on Transparency in Monetary and Financial Policies: Declaration of Principles", Washington, D.C.
- Karami, Gholamreza; Mazinani, Mehdi & Vakilifard, Hamidreza (2013), "Investigating the Relationship between Disclosure Level and Equity Cost in Tehran Stock Exchange Listed Companies, Quarterly Journal of the Stock Exchange, No. 21, pp. 47-71 (In Persian).
- Kopits, George, & Craig, Jon (1998), "Transparency in Government Operations", IMF Occasional Paper, No. 158 (Washington: International Monetary Fund).
- Malkiel, Burton G. (2003), "The Efficient Market Hypothesis and Its Critics", CEPS Working Paper, No. 91, Princeton University.
- Najafi, Ruhollah; Fallah Shams, Mirfeiz & Madanchi Zaj, Mehdi (2015), "Introduction of Supervision Pattern on Financial Institution in Iran Capital Market with Risk-Based Approach", Quarterly Journal of the Stock Exchange, No. 43, pp. 5-22 (In Persian).
- Shari, Saber & Marfou, Mohammad (2008), "The Relationship between the Percentage of Outside Directors and Institutional Investors with Properties of Earnings Forecast ", Quarterly Journal of Accounting Studies, No. 17, pp. 63-104 (In Persian).
- B) Websites
- Zhou, Qi (2005), The Evolution of Efficiency Principle: From Utilitarianism to Wealth Maximization, University of Leeds - School of Law. Available at SSRN: https://ssrn.com/abstract=870748or http://dx.doi.org/10.2139/ssrn.870748