potential effectiveness of alternatives measures. Consequently, the nature of the present inquiry straddles various different disciplines, including law, finance, economics, and jurisprudence. It was thought, therefore, that library-based research was the most appropriate method since many aspects of the study require conceptual and critical analyses of the contents of different materials at hand, in addition to the effort needed to collect data.
C) Literature Review
Both primary and secondary sources feature widely throughout this thesis, the former comprising both formal instruments and case law, and a list of primary sources is included as well as a full bibliography detailing the secondary sources consulted.
C.1. Primary Sources
The thesis focuses mainly on the regulatory regimes created in the two countries, with close examinations of legislation and its effects, and, therefore, the starting point is legislation in respect of brokerage services, namely the CML for Saudi Arabia, and FSMA for the UK.
Additionally, a number of documents produced by international organisations are mentioned in the course of the discussion. These include IOSCO publications such as ‘IOSCO Objectives and Principles of Securities Regulation’ and ‘IOSCO Principles Assessment Methodology’. These documents set out three objectives and thirty principles upon which the regulation of securities markets is based, including the regimes in Saudi Arabia and the UK.
Other primary sources in the thesis take the form of case material. Important cases with regard to brokerage business and financial advice are available within the English jurisdiction, such as JP Morgan Bank (formerly Chase Manhattan Bank) v Springwell Navigation Corp92. Again, the absence of a reporting system for cases in Saudi Arabia makes it difficult to obtain details of judicial decisions and, hence, determine the judicial approach used and interpretation made of legal texts.
Fortunately, there is a publication of the general principles reached by the Committee for Settling Banking Disputes, which has been of importance in providing insights into traditional tort principles in Saudi Arabia.
The publications by those authorities dealing with securities markets, including regulations, have been essential to the discussion and analysis in this research. Thus, the Financial Services Authority (henceforth FSA) materials in its Handbook, Policy Statements and other guidance have formed a major part of the primary resources used. In similar vein, the publications of the authority in Saudi Arabia, namely the CMA, that deals with the subject, such as its Conduct of Market Regulations (henceforth CMR) and Authorised Persons Regulations (henceforth APR), have been central subjects of discussion.
C.2. Secondary Sources
The nature of this inquiry dictates the examination of various different sources from a range of disciplines throughout the thesis, including those related to finance and economics, politics and political economy, the law, and theories of regulations.
92 [2008] EWHC 1186 (Comm)
Major works in finance and economics such as Stiglitz’, ‘The Role of The State in Financial Markets’ discuss the importance of states in financial markets.
Within the sphere of the relationship between financial markets and economic growth, different works by Levine have been prominent in discussions of relations between finance and the economy in the last decade, such as ‘Finance and the Sources of Growth’, ‘Financial Functions, Institutions, and Growth’, and ‘Financial Development and Economic Growth: Views and Agenda’. A methodological challenge was how to assess the relevant material, judging the quality of the contribution and the validity of the data analysis contained therein. For these reasons, special consideration has been given to factors such as citation history and the reputation of the journal as well as the reputation of the author.
The research relies on numerous previous studies that attempt to explain the role of law in the development of financial markets. These studies include Rioja et al.’s ‘Finance and the Sources of Growth at Various Stages of Economic Development’, Beck’s ‘Creating an Efficient Financial System: Challenges in a Global Economy’, Beck’s et al.’s ‘Law and Finance: Why Does Legal Origin Matter?’, and La Porta et al’s seminal work ‘Law and Finance’. In determining the relative importance of particular studies, consideration was given to strength of the narrative and analysis contained in then. It was also necessary to identify the limitations of the approaches adopted.
In the context of financial law and regulation, journal articles and Internet sources have been consulted relating to international organisations such as the IMF and the World Bank. These studies are important as they provide up-to-date
information and empirical and quantitative analyses which are adopted, promoted, or implemented by such organisations.
As far as English law in concerned, the study makes reference to major books, such as Black’s ‘Rules and Regulators’, Benjamin’s ‘Financial Law’ and Blair’s
‘Banking and Financial Services Regulation’. Reference is also made to documents and research provided by the FSA through its website, including the most notable and often-referenced work of Llewellyn, ‘The Economic Rationale for Financial Regulation’. In reviewing this type of literature, the contribution of an author was judged by his or her ability to cite relevant key texts from primary sources and to root their work in appropriate theories and concepts.
On the other hand, there is little published research concerning the CML.
Apart from an article by Beach, namely ‘The Saudi Arabian Capital Market Law: A Practical Study of the Creation of Law in Developing Markets’, there is no published work that deals thoroughly with the capital markets regulatory regime in Saudi Arabia. Most extant discussions relate to macro-economic analyses which are presented in works of politics or political economy without any detailed examination of the content of the law or regulations. Nevertheless, these books, such as ‘Islamic Law and Legal System: Studies of Saudi Arabia’ by Vogel, were of help in developing arguments in the present study as they provide details of the judicial structure in Saudi Arabia. Thus, extensive references to journals, articles, newsletters and business websites are included to substitute for the lack of academic references for Saudi Arabia, in addition to previous works by Saudi nationals in the form of PhD theses.
All secondary sources are fully referenced throughout the text on the basis of the Oxford Standard for Citation of Legal Authorities (OSCOLA).93 Abbreviations for legal journals throughout this thesis are given in accordance with the Cardiff Index of Legal Abbreviations.94 Otherwise, the full name of the journal is cited. It must be emphasised that most of the references are secondary, although primary sources of law and regulation are always preferred and given priority over secondary sources whenever each case study country’s legal framework is discussed. It is hoped that the weight of referencing does not affect the quality or flow of the arguments presented.