Supervision

Market regulation is defined as the set of mechanisms that allow markets to establish and maintain long-term balances that they cannot establish and maintain in the long term by their own forces. It is therefore a set of institutions and rules that relate to the markets and against which they are "black boxes".

On the other hand, it may happen that certain companies, because they are "crucial operators", justify that a public authority looks in transparency and controls its structure and its functioning. It is then a supervisory function.

It may happen that this supervisory function is exercised by the Regulatory Authority, when it ensures the solidity of a crucial operator, which the sector absolutely needs, for example because it manages a monopoly network. natural. It also happens that it is a separate Supervisory Authority, as is often the case in banking matters, supervision being provided by central bankers.

Supervision then takes the form of prudential supervision, ensures the solidity of the operators, that is to say enters into the operators and thus controls the adequacy of equity and quasi-equity , the organization of the company (rule of "four eyes" for the, which assumes that they not only a Chairman but also a CEO), control of managers etc. Thus prudential standards are indifferent to the market context. Regulation is for the outside, prudential is for the inside.

This opposition has turned out to be catastrophic since precisely there is communication between the inside and the outside when it comes to financial markets, since the financial market is a market of and information is designed inside. companies issuing the securities. Therefore, there can only be effective regulation if there is a well-designed prudential framework, and the opposition itself does not make sense, which is why many countries first identified the internal organs. to companies as soon as they emit information, thus feeding the markets and influencing the behavior of investors and other operators, as falling under regulation. This was the case with banks or investment service providers which are fully subject to financial regulation. The 2008 law gave full awareness of this continuum between prudential and regulatory and justified the creation of the Autorité de Control Prudentiel, which later became the Autorité de Control Prudential et de Résolution (ACPR), the integrity of the markets implying that the control of the reliability of the internal organization of certain operators with regard to their organization, the confidence that one can have in them and their way of exercising power, being the pledge of the solidity of the market itself.

This is why the new reflections on financial regulation, then on Regulation in general, highlight the notion of “”, which we could also call “crucial operators”, and which sets apart operators whose weight is so important. important on the market (regulatory criterion) that their internal organization must be special or particularly supervised (prudential criterion). Thus, regulation and governance, which were opposed, have become inseparable. This is aimed at all operators that a sector cannot do without. They become transparent to the public authority which supervises them.