Securities exchange regulations in the United States date back to the 1930s when the government sought to entice new investors after the stock markets crashed. The entity of securities exchange has come a long way since the 1930s. Currently, attention has shifted from safeguarding the interests of individual investors to minding the welfare of entities that have been mandated with taking care of private funds. Recently, the global economic crisis revealed how managers take unnecessary risks using their clients’ capital. In China, the system has been changing from a strictly communist trading environment to a capitalist-friendly regime. There are strong emerging capital markets in areas like the United Arab Emirates and South America. It is interesting to consider how the securities exchange regulations have changed over the last fifty years. This change can offer a glimpse of how these regulations will have changed in the next thirty years. On most occasions, securities regulations are modeled to protect the interests of investors while minding the dynamics of the economy. Therefore, in 2047 the securities exchange regulations are likely to align with the interests of both the economy and the investors. This paper reflects my insights and guesses about what the securities regulations might look like in 2047. The paper focuses on the trends in the United States whilst considering other major players like Europe, the Middle East, China, and Hong Kong.
In 2047, the main economic and political event is expected to be the integration of China and Hong Kong. In 2047, Hong Kong is expected to become just another province in China’s territory. Furthermore, the securities regulations that demarcate the two countries will be unified after these thirty-five years. The main question surrounding the unification of China and Hong Kong is which of these two systems will have shifted towards that of the other. The securities regulations that govern mainland China are expected to have changed to align with global capitalism. Nevertheless, the future of global capitalism is questionable.
Capitalism has dominated the world for close to a century and its popularity has waned and risen a great deal over this period. For example, most current tax regimes are set against the institution of capitalism. In thirty-five years, most of the world will be suffering from a ‘capitalism hangover’ and efforts will have shifted towards ensuring that resources are distributed as per individual efforts. Therefore, in a place like the United States, the people with most resources will be the intellectually gifted people, the talented, and the most physically active people. Consequently, capital ownership will not be a reserve of a few individuals but it will mostly be a multitude-affair. I expect all workers within a certain company to be major shareholders in that organization. The managers will hold considerably lesser powers in the decision-making processes. The United States securities regulatory authority will be tasked with the mandate of checking ‘inexplicable’ capital ownership. Currently, capital is obtained by mere opportunism but thirty-five years to come it will only be acquired through tangible means like labor, innovation, and leadership abilities. It will be up to the regulatory authority to determine the limits of capital ownership in all companies. For example, the ownership of securities in Apple Inc might be subdivided like this in the future; 20% of shares are reserved for workers, another 20% goes to distributors, another 20% to retailers, and the rest goes to interested parties.
In China, the diminished global capitalism will have endeared the country to the global economic systems. In addition, the interests of both China and Hong Kong will have gone full-circle. Consequently, both trading blocs will be eager to combine forces and become market leaders in the whole world. In 2047, the industrious China will have easily become a leading economic powerhouse. However, because capital ownership will be aligned to ability to generate raw and finished resources, China will be facing stiff challenges from resource-rich Africa and the Middle East. In this quagmire, the securities regulators in both China and Hong Kong will be eager to combine forces to be able to trade better with upcoming powerhouses like Brazil and some united African blocs.
Capitalism will be replaced by an ideal system that favors resourcefulness and the labor force. In this regard, the leading markets will be the intellectually resourceful China and India, the resourceful and labor-intensive Africa, and expansive Brazil. Africa has a seventy-percent of the population that is under thirty-five years and a wide array of unexploited resources. In the absence of capitalism, these two resources could be a determining factor in terms of economic power. In thirty-five years, most regulatory authorities will focus on the uniformity of voluntary trading blocs. Capitalism has contributed to trading blocs of convenience where communities that cannot integrate under normal circumstances are brought together by economic interests. The trend that is beginning with Britain’s need to withdraw from the European Union will continue and almost all trading blocs will have realigned by 2047. For instance, America and Canada’s homogeneity will be realized through a mutual trading bloc after the social and political rivalry has worn off. Countries like India that are defined by unique religious and social systems might be standing alone, economically, by the year 2047. Regulatory authorities will not team up with the sole intention of consolidating economic power. However, most regulatory authorities will be acting based on homogeneity in regard to monetary, social, religious, and immigration policies. In this regard, authorities such as China and Hong Kong, Canada and the United States, South Africa and Zimbabwe, and Qatar and the United Arab Emirates will have harmonized their transactions in line with other activities. For example, it is expected that there will be no border issues between these pairs of countries in 2047. The political boundaries within these pairs of countries will be mostly ‘virtual’ because other aspects such as currency, citizenship, and ease of doing business will be harmonized by 2047. Regulators of securities exchange will have an easy time adjusting policies to coincide with these new natural boundaries.
Currently, capitalism is at its peak, where it is accepted and glorified by citizens of the world. However, in 2047 the per capita earnings of individuals will be determined by their direct inputs. Consequently, 2047 will be a golden age of intellect where innovators, renowned teachers, authors, artists, and talented individuals will be holding the majority of the world’s capital. Some of these people will be equivalent to financial stocks. Among regulators, efforts will be directed towards making sure that the world does not slip back into the capitalist system where unscrupulous and lazy individuals ‘use’ others to accumulate capital. The system in 2047 will be different from communism because it will not concern itself with the equality of investors but it will only ensure that the input of an investor matches his/her capital ownership. For example, human labor will be the most expensive among costs of production. For regulatory authorities, the focus will shift to putting boundaries on who can and cannot claim ownership of equity in a certain organization. Accumulation will also be a thing of the past in various stock markets. The scarcity of capital will also reduce the instances of speculation that currently dominate securities exchange. In some cases, there will be queues of prospective buyers who will be scheduled to buy any available equity from a certain organization/entity. Nevertheless, capitalism will not fade out in the world at the exact same time. In 2047, there will be traces of capitalism in various parts of the world, especially in late-blooming economies such as the ones in Africa, Asia, and South America. Consequently, there will be instances of friction and disputes between regulators from different regions.
Some regulators are likely to accuse their counterparts of giving some individuals undue advantages when venturing into foreign markets. For example, it will be common practice for individuals to obtain clearance from their regulatory authorities before venturing into new markets. Consequently, some ‘rejected capitalists’ might be unleashed into foreign markets by conniving regulators. Countries on the opposite sides of the spectrum will find themselves suspecting each other of regulatory malpractices. Therefore, companies that seek to claim ownership in overseas entities will be expected to justify their claims through their local regulators. For instance, if a company in China wants to apply for equity in an affiliate company (a supplier or distributor) in the United States, it is up to the Chinese regulator to inform the American watchdog of this precedence. The regulator will disclose the potential investor’s claim to ownership through a declaration of affiliation.
In a time when capitalism will be replaced with an input-output system, trading in communist systems such as mainland China will have taken a new form. For instance, the investors in China will warm up to capitalist systems around 2025 but the rest of the world will have started to make improvements to this system. China will join these efforts in the hope that the rest of the world is leaning towards capitalism. However, the system of ownership will not revert to central/governing organs like the situation is in China and other communist countries. Instead, a new global system will focus on giving capital to its ‘rightful’ owners or those people who ‘work’ for it. Therefore, China will react to this system by disintegrating communist systems into minute units (that are not akin to individual investors) that will be used by the country to engage in international trading options. Capitalism will survive longest in Africa where land is a very valuable commodity and most traded securities involve this asset. Therefore, the securities regulation will evolve the least in this region. On the other hand, capitalism will disintegrate fastest in Western Europe, and regulations on securities will change fast and then become constant. Consequently, Europe will become the perceived regulatory benchmark for the rest of the world. In America, regulations will slightly be different from Europe but they will have attracted some other forces such as Canada and some parts of South America. In China, elements of communism will not have disappeared even by the year 2047, but they will be packaged differently. Regulators in some parts of Asia, Africa, and South America will still be struggling to get rid of clear capitalistic advantages in their securities systems.