Tania Ziegler, Rotem Shneor, K. Wenzlaff, Britney Wang, Jaesik Kim, Felipe Ferri de Camargo Paes, K. Suresh, B. Zhang, L. Mammadova, N. Adams
For the first time, the Cambridge Centre for Alternative Finance has consolidated its annual regional reports to produce one global benchmarking report, with the intention of presenting world-wide online alternative finance data for 2018.This report presents the key findings from the CCAF annual global survey of online alternative finance. In all, 1,227 unique firms contributed to this study, providing 2,322 firm-level observations globally. Investigating in crowdfunding, P2P/marketplace lending or related capital raising activities, the study shows that 47 per cent of the firms were operating in two or more countries or jurisdictions. Highlights from the report In 2018, the global alternative finance industry facilitated USD $304.5 billion in transaction volume. This global alternative finance volume is representative of funds that were raised via an online alternative finance platform for consumers, business and other fundraisers. This volume represents a 27 per cent annual decline against the $419 billion recorded in 2017. However, this drop in global volume stems primarily from a sharp decline in alternative finance activities in China. Excluding the Chinese market, the global alternative finance market volume actually grew by 48 per cent year-on-year, from the $60 billion in 2017 to $89 billion In 2018. China had the largest alternative finance volume by country, having generated a total of $215.37 billion in 2018. The United States ($61 billion) and the United Kingdom ($10.4 billion) came in second and third respectively. In 2018, five additional countries surpassed the $1 billion threshold of alternative finance market volume including the Netherlands ($1.8 billion), Indonesia ($1.45 billion), Germany ($1.27 billion), Australia ($1.16 billion) and Japan ($1.07 billion). In 2018, online alternative business funding for start-ups and SMEs accounted for $82 billion, which fell by almost half from the high of $153 billion recorded in 2017. Much like the global total market volume, this significant reduction in alternative business funding was largely due to the sharp decline in business focused funding activity in China. Excluding China, global business funding through alternative channels increased from the $21 billion in 2017 to $31 billion in 2018. This represented a 47 per cent annual increase against the previous year. Approximately $162 billion of alternative finance volumes directly stem from funding provided by institutional investors such as banks, pension funds, mutual funds and family offices. With the involvement of institutional investors on the rise, most regions were fairly equally split, with roughly 50 per cent of funding coming from the institutions and rest provided by retail investors.
剑桥另类金融中心(Cambridge Centre For Alternative Finance)首次将其年度地区报告合并为一份全球基准报告，旨在展示2018年全球在线另类金融数据。本报告介绍了CCAF在线替代金融年度全球调查的主要发现。总共有1227家公司参与了这项研究，在全球范围内提供了2322家公司层面的观察结果。对众筹、P2P/市场借贷或相关融资活动的调查显示，47%的公司在两个或两个以上的国家或司法管辖区开展业务。2018年，全球另类金融行业促成了3045亿美元的交易量。这一全球另类融资规模代表了通过在线另类融资平台为消费者、企业和其他筹款者筹集的资金。与2017年的4190亿美元相比，这一数字同比下降27%。然而，全球交易量的下降主要源于中国另类金融活动的急剧下降。不包括中国市场，全球替代金融市场规模实际上同比增长了48%，从2017年的600亿美元增长到2018年的890亿美元。按国家划分，中国的替代金融规模最大，2018年总计产生2153.7亿美元。美国(610亿美元)和英国(104亿美元)分列第二和第三位。2018年，另外五个国家的替代金融市场规模超过了10亿美元的门槛，包括荷兰(18亿美元)、印度尼西亚(14.5亿美元)、德国(12.7亿美元)、澳大利亚(11.6亿美元)和日本(10.7亿美元)。2018年，初创企业和中小企业的在线替代业务融资为820亿美元，比2017年创纪录的1530亿美元的高点下降了近一半。与全球市场总量一样，替代企业融资的大幅减少主要是由于中国以企业为重点的融资活动急剧下降。不包括中国在内，全球通过替代渠道的商业融资从2017年的210亿美元增加到2018年的310亿美元。这比前一年增加了47%。约1620亿美元的另类融资直接来自银行、养老基金、共同基金和家族理财室等机构投资者提供的资金。随着机构投资者参与度的增加，大多数地区的资金分配相当平均，大约50%的资金来自机构投资者，其余由散户投资者提供。
{"title":"The Global Alternative Finance Market Benchmarking Report","authors":"Tania Ziegler, Rotem Shneor, K. Wenzlaff, Britney Wang, Jaesik Kim, Felipe Ferri de Camargo Paes, K. Suresh, B. Zhang, L. Mammadova, N. Adams","doi":"10.2139/SSRN.3771509","DOIUrl":"https://doi.org/10.2139/SSRN.3771509","url":null,"abstract":"For the first time, the Cambridge Centre for Alternative Finance has consolidated its annual regional reports to produce one global benchmarking report, with the intention of presenting world-wide online alternative finance data for 2018.This report presents the key findings from the CCAF annual global survey of online alternative finance. In all, 1,227 unique firms contributed to this study, providing 2,322 firm-level observations globally. Investigating in crowdfunding, P2P/marketplace lending or related capital raising activities, the study shows that 47 per cent of the firms were operating in two or more countries or jurisdictions. \u0000 \u0000Highlights from the report \u0000 \u0000In 2018, the global alternative finance industry facilitated USD $304.5 billion in transaction volume. This global alternative finance volume is representative of funds that were raised via an online alternative finance platform for consumers, business and other fundraisers. This volume represents a 27 per cent annual decline against the $419 billion recorded in 2017. However, this drop in global volume stems primarily from a sharp decline in alternative finance activities in China. Excluding the Chinese market, the global alternative finance market volume actually grew by 48 per cent year-on-year, from the $60 billion in 2017 to $89 billion In 2018. \u0000 \u0000China had the largest alternative finance volume by country, having generated a total of $215.37 billion in 2018. The United States ($61 billion) and the United Kingdom ($10.4 billion) came in second and third respectively. In 2018, five additional countries surpassed the $1 billion threshold of alternative finance market volume including the Netherlands ($1.8 billion), Indonesia ($1.45 billion), Germany ($1.27 billion), Australia ($1.16 billion) and Japan ($1.07 billion). \u0000 \u0000In 2018, online alternative business funding for start-ups and SMEs accounted for $82 billion, which fell by almost half from the high of $153 billion recorded in 2017. Much like the global total market volume, this significant reduction in alternative business funding was largely due to the sharp decline in business focused funding activity in China. Excluding China, global business funding through alternative channels increased from the $21 billion in 2017 to $31 billion in 2018. This represented a 47 per cent annual increase against the previous year. \u0000 \u0000Approximately $162 billion of alternative finance volumes directly stem from funding provided by institutional investors such as banks, pension funds, mutual funds and family offices. With the involvement of institutional investors on the rise, most regions were fairly equally split, with roughly 50 per cent of funding coming from the institutions and rest provided by retail investors.","PeriodicalId":233958,"journal":{"name":"European Finance eJournal","volume":"63 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-01-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122592277","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Marcelo Ortiz M., Caspar David Peter, F. Urzúa I., P. Volpin
Taking advantage of the implementation of the 2003 European Commission (EC) directive on financial reporting, we explore the impact of mandatory financial disclosure on mergers and acquisitions (M&A). We find robust evidence that the number (and volume) of private firms becoming an M&A target increases with mandatory disclosure. Analyses of cross-industry differences, deal-level data, and post-deal performance indicate that financial disclosure increases M&A activity by reducing information frictions in the market for corporate control. Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online
{"title":"Mandatory Financial Disclosure and M&A Activity","authors":"Marcelo Ortiz M., Caspar David Peter, F. Urzúa I., P. Volpin","doi":"10.2139/ssrn.3768349","DOIUrl":"https://doi.org/10.2139/ssrn.3768349","url":null,"abstract":"\u0000 Taking advantage of the implementation of the 2003 European Commission (EC) directive on financial reporting, we explore the impact of mandatory financial disclosure on mergers and acquisitions (M&A). We find robust evidence that the number (and volume) of private firms becoming an M&A target increases with mandatory disclosure. Analyses of cross-industry differences, deal-level data, and post-deal performance indicate that financial disclosure increases M&A activity by reducing information frictions in the market for corporate control.\u0000 Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online","PeriodicalId":233958,"journal":{"name":"European Finance eJournal","volume":" 31","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-01-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"113948644","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Custodians play a key but discrete role in the global financial market infrastructure. In Europe, they are licensed as “credit institutions ”, a legal requirement for European deposit-taking institutions, and therefore they face the same prudential requirements as “traditional” banks. However, their business model and risk profile are different from those of traditional banks since the core of their activity does not encompass balance sheet transformation and the associated risks.
{"title":"One Size Fits Some: Analysing Profitability, Capital and Liquidity Constraints of Custodian Banks Through the Lens of the Srep Methodology","authors":"Charles-Enguerrand Coste, Céline Tcheng, Ingmar Vansieleghem","doi":"10.2139/ssrn.3797127","DOIUrl":"https://doi.org/10.2139/ssrn.3797127","url":null,"abstract":"Custodians play a key but discrete role in the global financial market infrastructure. In Europe, they are licensed as “credit institutions ”, a legal requirement for European deposit-taking institutions, and therefore they face the same prudential requirements as “traditional” banks. However, their business model and risk profile are different from those of traditional banks since the core of their activity does not encompass balance sheet transformation and the associated risks.","PeriodicalId":233958,"journal":{"name":"European Finance eJournal","volume":"54 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123910577","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We analyse the impact of the Liquidity Coverage Ratio (LCR) on the demand for central bank reserves in the euro area with difference-in-differences estimation techniques. Using a novel dataset and an identification strategy that exploits the cross-country heterogeneity in the regulatory treatment of reserves for LCR purposes prior to the announcement of a harmonised euro area standard as a quasi-natural experiment, we find evidence that points to LCR-induced demand for reserves. Specifically, our results suggest that banks with low LCRs relative to peers increased their central bank reserve holdings as a result of the LCR regulation. Our findings have economically meaningful implications for the operational framework of monetary policy and imply that the Eurosystem’s balance sheet may need to remain larger than it was prior to the financial crisis and the associated introduction of new liquidity regulation. JEL Classification: C23, E52, G28
{"title":"The Implications of Liquidity Regulation for Monetary Policy Implementation and the Central Bank Balance Sheet Size: An Empirical Analysis of the Euro Area","authors":"Danielle Kedan, Alexia Ventula Veghazy","doi":"10.2866/651161","DOIUrl":"https://doi.org/10.2866/651161","url":null,"abstract":"We analyse the impact of the Liquidity Coverage Ratio (LCR) on the demand for central bank reserves in the euro area with difference-in-differences estimation techniques. Using a novel dataset and an identification strategy that exploits the cross-country heterogeneity in the regulatory treatment of reserves for LCR purposes prior to the announcement of a harmonised euro area standard as a quasi-natural experiment, we find evidence that points to LCR-induced demand for reserves. Specifically, our results suggest that banks with low LCRs relative to peers increased their central bank reserve holdings as a result of the LCR regulation. Our findings have economically meaningful implications for the operational framework of monetary policy and imply that the Eurosystem’s balance sheet may need to remain larger than it was prior to the financial crisis and the associated introduction of new liquidity regulation. JEL Classification: C23, E52, G28","PeriodicalId":233958,"journal":{"name":"European Finance eJournal","volume":"45 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117190818","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In this short note we briefly review the state of the art of the ongoing transition from interbank rates (IBORs) to alternative risk free rates, with a focus on LIBOR and EUR benchmark rates. This note is a reduced version of a position paper published by AIFIRM in December 2019 [1], reporting more details regarding the impacts of the transition on Bank’s internal processes, updated to December 2020.
{"title":"Moving from IBORs to Alternative Risk Free Rates","authors":"V. Falco, M. Bianchetti, Umberto Cherubini","doi":"10.2139/ssrn.3757940","DOIUrl":"https://doi.org/10.2139/ssrn.3757940","url":null,"abstract":"In this short note we briefly review the state of the art of the ongoing transition from interbank rates (IBORs) to alternative risk free rates, with a focus on LIBOR and EUR benchmark rates. This note is a reduced version of a position paper published by AIFIRM in December 2019 [1], reporting more details regarding the impacts of the transition on Bank’s internal processes, updated to December 2020.","PeriodicalId":233958,"journal":{"name":"European Finance eJournal","volume":"4 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-12-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124671987","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper investigates the economic consequences of the European Union’s directive on non-financial disclosure (NFRD). We analyze data from a sample of 698 European firms and a matched control group of US firms to investigate two questions. First, we examine what effects the implementation of the NFRD has on a firm’s CSR disclosure level. Based on a sample of 5,584 firm-year observations, our results show that the NFRD has a positive effect on the level of CSR disclosure in the group of treated firms relative to the control group. This effect is more pronounced in countries where the scope of the mandate is further specified and sanctions in case of non-compliance are stronger. The effect is weaker in countries where national regulations require integrated reporting. Second, we examine how the relationship between CSR disclosure and firm value in the treatment group developed since CSR disclosure became mandatory, i.e., in 2017 and 2018. Our results show that the relationship between the voluntary components of CSR disclosure and firm value is positive. However, we found no evidence that the mandatory component of CSR disclosure has a significant effect on firm value.
{"title":"The European Union Non-Financial Reporting Directive: Evidence on Regulatory Parameters and Firm-Value Consequences","authors":"Katrin Hummel","doi":"10.2139/ssrn.3744653","DOIUrl":"https://doi.org/10.2139/ssrn.3744653","url":null,"abstract":"This paper investigates the economic consequences of the European Union’s directive on non-financial disclosure (NFRD). We analyze data from a sample of 698 European firms and a matched control group of US firms to investigate two questions. First, we examine what effects the implementation of the NFRD has on a firm’s CSR disclosure level. Based on a sample of 5,584 firm-year observations, our results show that the NFRD has a positive effect on the level of CSR disclosure in the group of treated firms relative to the control group. This effect is more pronounced in countries where the scope of the mandate is further specified and sanctions in case of non-compliance are stronger. The effect is weaker in countries where national regulations require integrated reporting. Second, we examine how the relationship between CSR disclosure and firm value in the treatment group developed since CSR disclosure became mandatory, i.e., in 2017 and 2018. Our results show that the relationship between the voluntary components of CSR disclosure and firm value is positive. However, we found no evidence that the mandatory component of CSR disclosure has a significant effect on firm value.","PeriodicalId":233958,"journal":{"name":"European Finance eJournal","volume":"31 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-12-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128436045","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper analyzes the limit order book events arrival dependency structure using high-dimensional Hawkes processes. We seek for recurrent relationships among events from a set of 86 event types which in addition to transactions, includes limit order submissions and cancellations taking place up to the 20th depth level of the order book. We focus on BMW, SAP, and ADS, three liquid DAX 30 index stocks for which we have a microsecond stamped high-frequency dataset covering the 61 trading day period going from February 1 to March 31, 2013. For each stock, we build a tailored descriptive model by selecting recurrent events relationships. Estimated on a daily basis, we find that the selected models offer interesting data fitting performance, particularly for limit order submissions and cancellations occurring on the first five price levels of the order book. Finally, we use the comprehensive sets of estimated parameters to describe a global events arrival dynamics that we relate to the potential behaviors of market participants having different objectives and directional views.
{"title":"Deep Limit Order Book Events Dynamics","authors":"Yann Bilodeau","doi":"10.2139/ssrn.3744526","DOIUrl":"https://doi.org/10.2139/ssrn.3744526","url":null,"abstract":"This paper analyzes the limit order book events arrival dependency structure using high-dimensional Hawkes processes. We seek for recurrent relationships among events from a set of 86 event types which in addition to transactions, includes limit order submissions and cancellations taking place up to the 20th depth level of the order book. We focus on BMW, SAP, and ADS, three liquid DAX 30 index stocks for which we have a microsecond stamped high-frequency dataset covering the 61 trading day period going from February 1 to March 31, 2013. For each stock, we build a tailored descriptive model by selecting recurrent events relationships. Estimated on a daily basis, we find that the selected models offer interesting data fitting performance, particularly for limit order submissions and cancellations occurring on the first five price levels of the order book. Finally, we use the comprehensive sets of estimated parameters to describe a global events arrival dynamics that we relate to the potential behaviors of market participants having different objectives and directional views.","PeriodicalId":233958,"journal":{"name":"European Finance eJournal","volume":"7 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-12-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129134506","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The suitability requirements (SRs) regulated in the Markets in Financial Instruments Directive (MiFID) II have attained a new, additional role. Traditionally used to protect investors from abusive conduct perpetrated by advisers and portfolio managers, the SRs have now become a critical component of the EU policy on sustainable finance. In this new role, the SRs are expected to provide a unique setting for advisers and portfolio managers to identify, negotiate, and treat the environmental, social and governance (ESG) preferences of their clients. Reshaped SRs will empower those clients willing to allocate their savings to fund ESG-friendly projects and companies, and thereby, directly infuse sustainability into the financial system. The success of this policy, however, has required reform. This Article addresses the problem of how to design SRs that are adequate to the ESG context. The first part of the Article explains the rules governing the SRs in the MiFID II regime and outlines the European Commission’s proposed amendments to such rules. The second part of the Article identifies and critically analyzes various solutions suggested by the industry. The investigation relied upon European Union (EU) law and policy documents. Importantly, the content of sixty-four responses submitted by industry actors to the public consultation on this subject launched by European Securities and Markets Authority (ESMA) was also analyzed. The findings shed light on the contours and implications of the suitability obligation of investment advisers and portfolio managers in the realm of sustainable finance.
{"title":"The EU Policy on Sustainable Finance: A Discussion on the Design of ESG-Fit Suitability Requirements","authors":"Félix E. Mezzanotte","doi":"10.2139/ssrn.3769009","DOIUrl":"https://doi.org/10.2139/ssrn.3769009","url":null,"abstract":"The suitability requirements (SRs) regulated in the Markets in Financial Instruments Directive (MiFID) II have attained a new, additional role. Traditionally used to protect investors from abusive conduct perpetrated by advisers and portfolio managers, the SRs have now become a critical component of the EU policy on sustainable finance. In this new role, the SRs are expected to provide a unique setting for advisers and portfolio managers to identify, negotiate, and treat the environmental, social and governance (ESG) preferences of their clients. Reshaped SRs will empower those clients willing to allocate their savings to fund ESG-friendly projects and companies, and thereby, directly infuse sustainability into the financial system. The success of this policy, however, has required reform. \u0000 \u0000This Article addresses the problem of how to design SRs that are adequate to the ESG context. The first part of the Article explains the rules governing the SRs in the MiFID II regime and outlines the European Commission’s proposed amendments to such rules. The second part of the Article identifies and critically analyzes various solutions suggested by the industry. The investigation relied upon European Union (EU) law and policy documents. Importantly, the content of sixty-four responses submitted by industry actors to the public consultation on this subject launched by European Securities and Markets Authority (ESMA) was also analyzed. The findings shed light on the contours and implications of the suitability obligation of investment advisers and portfolio managers in the realm of sustainable finance.","PeriodicalId":233958,"journal":{"name":"European Finance eJournal","volume":"62 2","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-11-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133293237","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We extract the news component of short-selling activity by accounting for important cross-sectional, distributional differences in short interest. The resulting measure of surprise in short interest negatively predicts the cross section of both U.S. and international equity returns. Our results also indicate that this predictability originates from short sellers' informed trading on mispricing and the market's underreaction to the news component of short-sale reports. Consistent with the notion of costly arbitrage, the return predictability is stronger among illiquid, volatile stocks and stocks with high information uncertainty, but importantly, unrelated short-selling frictions.
{"title":"Surprise in Short Interest","authors":"M. Hanauer, Pavel Lesnevski, Esad Smajlbegovic","doi":"10.2139/ssrn.3736891","DOIUrl":"https://doi.org/10.2139/ssrn.3736891","url":null,"abstract":"We extract the news component of short-selling activity by accounting for important cross-sectional, distributional differences in short interest. The resulting measure of surprise in short interest negatively predicts the cross section of both U.S. and international equity returns. Our results also indicate that this predictability originates from short sellers' informed trading on mispricing and the market's underreaction to the news component of short-sale reports. Consistent with the notion of costly arbitrage, the return predictability is stronger among illiquid, volatile stocks and stocks with high information uncertainty, but importantly, unrelated short-selling frictions.","PeriodicalId":233958,"journal":{"name":"European Finance eJournal","volume":"175 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-11-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134450111","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The new European Crowdfunding Service Providers Regulation aims at harmonizing the financial crowdfunding regulatory framework in the EU. In many respects inspired by MiFID II, it draws a distinction between crowdfunding services and investment services, but at the same time raises new questions. It seems the Regulation might have a significant impact on how the content of investment-based crowdfunding as well as individual investment services is to be interpreted. The paper aims firstly to analyse the scope of the new Regulation, with special attention to the exemptions set by the Regulation itself as well as those originating from the EU financial services regulatory architecture. Secondly, it evaluates the relationship between investment-based crowdfunding and investment services under MiFID II, namely the reception and transmission of orders and placing on no-commitment basis, in order to distinguish the respective types of activities. Attention is given particularly to the simultaneous provision of reception and transmission of orders and placing on the no-commitment basis as a conceptual characteristic of financial crowdfunding. Finally, the consequences the Regulation might have for the interpretation of scope and content of certain present investment services under MiFID II are analysed. Namely, placing on the no-commitment basis, investment advice and portfolio management are put under scrutiny.
{"title":"The New Financial Crowdfunding Regulation and Its Implications for Investment Services under MiFID II","authors":"Martin Hobza, Aneta Vondráčková","doi":"10.2139/ssrn.3725997","DOIUrl":"https://doi.org/10.2139/ssrn.3725997","url":null,"abstract":"The new European Crowdfunding Service Providers Regulation aims at harmonizing the financial crowdfunding regulatory framework in the EU. In many respects inspired by MiFID II, it draws a distinction between crowdfunding services and investment services, but at the same time raises new questions. It seems the Regulation might have a significant impact on how the content of investment-based crowdfunding as well as individual investment services is to be interpreted. The paper aims firstly to analyse the scope of the new Regulation, with special attention to the exemptions set by the Regulation itself as well as those originating from the EU financial services regulatory architecture. Secondly, it evaluates the relationship between investment-based crowdfunding and investment services under MiFID II, namely the reception and transmission of orders and placing on no-commitment basis, in order to distinguish the respective types of activities. Attention is given particularly to the simultaneous provision of reception and transmission of orders and placing on the no-commitment basis as a conceptual characteristic of financial crowdfunding. Finally, the consequences the Regulation might have for the interpretation of scope and content of certain present investment services under MiFID II are analysed. Namely, placing on the no-commitment basis, investment advice and portfolio management are put under scrutiny.","PeriodicalId":233958,"journal":{"name":"European Finance eJournal","volume":"63 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-11-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115673829","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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