About self-regulation 

The recommendations administered by the Securities Market Association are based on the self-regulation of the business sector.

Self-regulation can be considered as law which completes legislation. For self-regulation it is characteristic that the institutions attending it control, supervise and, if necessary, sanction the behavior of their members.

Self-regulation means on the one hand the rules which the business sector has voluntarily created to regulate the practice of companies, but on the other hand it also means the control mechanisms concerning them. By its nature self-regulation is judicial regulation which shall be executed outside of the primary regulation system. If self-regulation does not base on the current regulation system directly, it can be considered as so-called genuine self-regulation.

Co-regulation can be described as a combination of legislation and self-regulation, where some public tasks are operated by a civil law organization. By its nature co-regulation is self-regulation supported by legislation, where the legislation defines the purposes of the regulation, required time limits, controlling and execution. However, the decisions, especially the devices realizing the objectives, remain mainly at the appropriate actors themselves. Thus, co-regulation is a certain mixture of norm-regulation and self-regulation.

The basis of self-regulation is mainly practical. Self-regulation norms can be drafted more practical and specific than legislation. They may also be amended more easily than legislation and they may complement legislation. The objective may also be reducing the amount of matters taken before court if it is obvious that matters can properly be settled otherwise. One has often considered the possibility to avoid public procedures as a advantage of self-regulation. Other benefits of the self-regulation system are effectiveness, expertise, quick procedure and possibility to obtain statement in advance. By means of self-regulation companies seek the most convenient way to solve their mutual problems.

Typical for the self-regulation of the business sector is that

1. it is voluntary
2. it is established in co-operation of industry organization(s)
3. the level of its binding force varies
4. it is more detailed than legislation
5. it replaces or complements legislation
6. it may include controlling and consequences of its violation