During the globalization era, many developing countries have experienced the significant improvements in the financial markets. Similarly, Turkey has identified the leveraged trading in 2011, known as the FOREX trading, as a capital market activity to bring depth to financial markets. There is a fact that the number of trading volume and the number of companies in the FOREX market has been risen after the regulation in 2011. However, the regulation has also brought about other problems as well and a new regulation on the FOREX market was released in February 2017. This paper explains the reasons for the realization of regulation in the FOREX markets and takes the concepts of new institutional economics into account: asymmetric information, bounded rationality, incomplete contracts, and opportunism.
Key words: New Institutional Economics, Regulation, Incomplete Contract. JEL Classification Codes: E02, G18, B15. Article Language: EnglishTurkish
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