Fintech firms, once seen as ‘disruptors’ of the traditional banking world, are now increasingly seen as attractive partners for established financial institutions. Such partnership agreements come in different forms and contexts, but most share the goals of outsourcing key banking functions and facilitating market entry for new market players while overcoming relatively tough regulatory hurdles. Yet such arrangements, while generally to be welcomed, pose a number of regulatory problems, in particular concerning the effective supervision of fintechs that operate outside of the direct purview of regulatory authorities. Questions of enforcement and effective supervision emerge, which may ultimately result in problems regarding market stability and systemic risk. Regulatory sandboxes represent one attempt to address these problems but may fail to do so and are often ineffective or unavailable. Other similar solutions, such as fintech charters and umbrella firms, may help but, similarly, provide an imperfect solution. Against this backdrop, we make the case for a ‘mentorship regime’, which provides for a reliable regulatory framework for partnership agreements between fintech firms and established banks. This would allow for a de facto ‘private sandbox’ where experienced firms could mentor new startups and help them to cope with a complex regulatory process. At the same time, a state-backed mentorship plan would clear up the allocation of responsibilities, supervision competences, and liability questions and thus overcome problems of arbitrage and abuse. Ultimately, a mentorship regime may show the way to a new and more reliable future system of banking, making the well-stablished contractual practice of outsourcing banking services more reliable.
{"title":"Bank–fintech partnerships, outsourcing arrangements and the case for a mentorship regime","authors":"L. Enriques, W. Ringe","doi":"10.1093/cmlj/kmaa019","DOIUrl":"https://doi.org/10.1093/cmlj/kmaa019","url":null,"abstract":"Fintech firms, once seen as ‘disruptors’ of the traditional banking world, are now increasingly seen as attractive partners for established financial institutions. Such partnership agreements come in different forms and contexts, but most share the goals of outsourcing key banking functions and facilitating market entry for new market players while overcoming relatively tough regulatory hurdles. \u0000 \u0000Yet such arrangements, while generally to be welcomed, pose a number of regulatory problems, in particular concerning the effective supervision of fintechs that operate outside of the direct purview of regulatory authorities. Questions of enforcement and effective supervision emerge, which may ultimately result in problems regarding market stability and systemic risk. Regulatory sandboxes represent one attempt to address these problems but may fail to do so and are often ineffective or unavailable. Other similar solutions, such as fintech charters and umbrella firms, may help but, similarly, provide an imperfect solution. \u0000 \u0000Against this backdrop, we make the case for a ‘mentorship regime’, which provides for a reliable regulatory framework for partnership agreements between fintech firms and established banks. This would allow for a de facto ‘private sandbox’ where experienced firms could mentor new startups and help them to cope with a complex regulatory process. At the same time, a state-backed mentorship plan would clear up the allocation of responsibilities, supervision competences, and liability questions and thus overcome problems of arbitrage and abuse. Ultimately, a mentorship regime may show the way to a new and more reliable future system of banking, making the well-stablished contractual practice of outsourcing banking services more reliable.","PeriodicalId":43720,"journal":{"name":"Capital Markets Law Journal","volume":"15 1","pages":"374-397"},"PeriodicalIF":0.7,"publicationDate":"2020-12-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1093/cmlj/kmaa019","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45088547","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}
{"title":"Benchmarks reform: risk-free benchmarks, IBOR fallbacks and the prohibition on compound interest under Italian law","authors":"G. M. Danusso, Matteo Bencic","doi":"10.1093/cmlj/kmaa017","DOIUrl":"https://doi.org/10.1093/cmlj/kmaa017","url":null,"abstract":"","PeriodicalId":43720,"journal":{"name":"Capital Markets Law Journal","volume":"15 1","pages":"398-417"},"PeriodicalIF":0.7,"publicationDate":"2020-12-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1093/cmlj/kmaa017","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45194557","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}
{"title":"The Argentine collective action clause controversy","authors":"L. Buchheit, Mitu G. Gulati","doi":"10.1093/cmlj/kmaa016","DOIUrl":"https://doi.org/10.1093/cmlj/kmaa016","url":null,"abstract":"","PeriodicalId":43720,"journal":{"name":"Capital Markets Law Journal","volume":"15 1","pages":"464-473"},"PeriodicalIF":0.7,"publicationDate":"2020-12-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1093/cmlj/kmaa016","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48836002","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}
markdownabstract__Key points__ • Article 17 MAR sets out the legal framework with respect to the disclosure of inside information. Article 17(1) MAR contains the primary duty to disclose inside information and stipulates that the issuer must disclose inside information that directly concerns that issuer. Article 17(4) MAR grants the issuer the possibility to delay the disclosure of inside information if three cumulative conditions are met; once one or more conditions are no longer met, the primary duty revives. • In addition to the primary duty, two separate duties to disclose have been included in Article 17 MAR: i) Article 17(8) MAR stipulates that the issuer must make complete and public disclosure of inside information that is disclosed to selected parties and ii) if the issuer had opted to delay the disclosure of inside information, Article 17(7) MAR stipulates that the issuer must make complete and public disclosure of that information if it has lost its confidential nature. • One could raise doubts over the necessity and function of Paragraphs 8 and 7 of Article 17 MAR. However, in this Paper we defend the independent status of these Paragraphs. If the inside information has lost its non-public nature, the duty to disclose that information can no longer be based on Article 17(1) MAR. Paragraphs 8 and 7 of Article 17 MAR contribute to legal certainty and to achieving the goals of the MAR.
{"title":"The subtle relationship between paragraphs 1, 4, 7 and 8 of Article 17 of the Market Abuse Regulation","authors":"M J Giltjes, A C W Pijls","doi":"10.1093/cmlj/kmaa020","DOIUrl":"https://doi.org/10.1093/cmlj/kmaa020","url":null,"abstract":"markdownabstract__Key points__ • Article 17 MAR sets out the legal framework with respect to the disclosure of inside information. Article 17(1) MAR contains the primary duty to disclose inside information and stipulates that the issuer must disclose inside information that directly concerns that issuer. Article 17(4) MAR grants the issuer the possibility to delay the disclosure of inside information if three cumulative conditions are met; once one or more conditions are no longer met, the primary duty revives. • In addition to the primary duty, two separate duties to disclose have been included in Article 17 MAR: i) Article 17(8) MAR stipulates that the issuer must make complete and public disclosure of inside information that is disclosed to selected parties and ii) if the issuer had opted to delay the disclosure of inside information, Article 17(7) MAR stipulates that the issuer must make complete and public disclosure of that information if it has lost its confidential nature. • One could raise doubts over the necessity and function of Paragraphs 8 and 7 of Article 17 MAR. However, in this Paper we defend the independent status of these Paragraphs. If the inside information has lost its non-public nature, the duty to disclose that information can no longer be based on Article 17(1) MAR. Paragraphs 8 and 7 of Article 17 MAR contribute to legal certainty and to achieving the goals of the MAR.","PeriodicalId":43720,"journal":{"name":"Capital Markets Law Journal","volume":"58 1","pages":""},"PeriodicalIF":0.7,"publicationDate":"2020-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138540248","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}
Few recent cases in finance have attracted as much interest — and vitriol — as last year’s decision in U.S. Bank National Association v. Windstream Services, LLC v. Aurelius Capital Master, Ltd. (S.D.N.Y. 2019). This brief summary explores some of the larger debates in corporate finance and contracts raised by the case. The Windstream opinion made waves not because it was (arguably) incorrectly decided, but because it hastened creditors’ recognition that no amount of contractual armor can fully protect them from opportunistic behavior in today’s markets. Although the specific objectionable behavior in Windstream is already being addressed by new contract provisions, the reality is that sophisticated hedge funds, other creditors, and borrowers will always find ways to exploit contract language to their advantage. And that task may ironically be made easier by today’s style of contract drafting. The more detailed and complex contracts become, the more easily they can be exploited ex post, when the state of the world and the parties’ incentives have changed.
最近的金融案件很少像去年美国国家银行协会诉Windstream Services，LLC诉Aurelius Capital Master，有限公司案（s.D.N.Y.2019）的裁决那样引起人们的兴趣和尖酸刻薄。本摘要探讨了本案在公司融资和合同方面引发的一些更大的争论。Windstream的意见之所以掀起波澜，并不是因为它（可以说）决定错误，而是因为它加速了债权人的认识，即在当今市场上，再多的合同盔甲也无法完全保护他们免受机会主义行为的影响。尽管Windstream的具体不良行为已经通过新的合同条款得到了解决，但现实是，老练的对冲基金、其他债权人和借款人总是会想方设法利用合同语言为自己谋利。具有讽刺意味的是，今天的合同起草风格可能会让这项任务变得更容易。当世界状况和各方的动机发生变化时，合同越详细、越复杂，就越容易被事后利用。
{"title":"Windstream and contract opportunism","authors":"É. Fontenay","doi":"10.1093/cmlj/kmaa021","DOIUrl":"https://doi.org/10.1093/cmlj/kmaa021","url":null,"abstract":"Few recent cases in finance have attracted as much interest — and vitriol — as last year’s decision in U.S. Bank National Association v. Windstream Services, LLC v. Aurelius Capital Master, Ltd. (S.D.N.Y. 2019). This brief summary explores some of the larger debates in corporate finance and contracts raised by the case. The Windstream opinion made waves not because it was (arguably) incorrectly decided, but because it hastened creditors’ recognition that no amount of contractual armor can fully protect them from opportunistic behavior in today’s markets. Although the specific objectionable behavior in Windstream is already being addressed by new contract provisions, the reality is that sophisticated hedge funds, other creditors, and borrowers will always find ways to exploit contract language to their advantage. And that task may ironically be made easier by today’s style of contract drafting. The more detailed and complex contracts become, the more easily they can be exploited ex post, when the state of the world and the parties’ incentives have changed.","PeriodicalId":43720,"journal":{"name":"Capital Markets Law Journal","volume":" ","pages":""},"PeriodicalIF":0.7,"publicationDate":"2020-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1093/cmlj/kmaa021","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48095347","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}
{"title":"Restructuring the European Stability Mechanism","authors":"Aitor Erce","doi":"10.1093/cmlj/kmaa009","DOIUrl":"https://doi.org/10.1093/cmlj/kmaa009","url":null,"abstract":"","PeriodicalId":43720,"journal":{"name":"Capital Markets Law Journal","volume":"15 1","pages":"284-297"},"PeriodicalIF":0.7,"publicationDate":"2020-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1093/cmlj/kmaa009","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43594033","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}
An age-old question in the world of securities disclosure is whether there is value in mandating that issuers disclose key pieces of information about themselves to the investing public or whether these issuers will voluntarily disclose the optimal amount of information as a function of reputational pressures. Many academic articles have been written about this topic, and different regulatory systems around the world take starkly different positions on the question. Yet, there is no clear answer to the core question of whether issuers will voluntarily disclose useful information that only they know to investors at key times (eg when investors are being asked to buy securities) or whether a mandatory system with penalties and monitoring is necessary to induce this disclosure. The current COVID-19 pandemic may present an opportunity to examine this question in the sovereign issuer context. As a result of a strange confluence of factors, there seems to little negative effect of this global pandemic on the international sovereign debt market. If anything, this market is booming more than ever with countries across the range ratings quality being able to borrow billions of dollars at rates comparable to preCOVID times. Important for purposes of the question we have raised, each and every one of these countries has been impacted by the pandemic differently. And, more important, each of these countries is taking different steps to tackle the crisis and has information as to what is going on at the local level that global investors likely know little about. One might ask therefore: are we seeing these different issuers, who the market has been showering with billions of dollars in lending, disclose the kind of detailed information as to their responses to the pandemic and how they are going to get out from under it that investors would like to have? For sovereigns, there is no mandatory requirement that they disclose anything on the matter of pandemic responses, so what we are talking about is their voluntary disclosure. Let us take the example of Brazil. It issued $3.5 billion in sovereign bonds in the international markets a few weeks ago. That Brazil was able to place such a large issuance in the context of the pandemic is particularly noteworthy since its government’s response to the pandemic is widely considered to be among the most disastrous in the world. One might think though that perhaps, in order to persuade investors to give it these billions, Brazil’s leading public health expert will have prepared detailed explanations for how and why the
{"title":"The value of voluntary COVID-19 securities disclosure—zero?","authors":"Mitu G. Gulati","doi":"10.1093/cmlj/kmaa014","DOIUrl":"https://doi.org/10.1093/cmlj/kmaa014","url":null,"abstract":"An age-old question in the world of securities disclosure is whether there is value in mandating that issuers disclose key pieces of information about themselves to the investing public or whether these issuers will voluntarily disclose the optimal amount of information as a function of reputational pressures. Many academic articles have been written about this topic, and different regulatory systems around the world take starkly different positions on the question. Yet, there is no clear answer to the core question of whether issuers will voluntarily disclose useful information that only they know to investors at key times (eg when investors are being asked to buy securities) or whether a mandatory system with penalties and monitoring is necessary to induce this disclosure. The current COVID-19 pandemic may present an opportunity to examine this question in the sovereign issuer context. As a result of a strange confluence of factors, there seems to little negative effect of this global pandemic on the international sovereign debt market. If anything, this market is booming more than ever with countries across the range ratings quality being able to borrow billions of dollars at rates comparable to preCOVID times. Important for purposes of the question we have raised, each and every one of these countries has been impacted by the pandemic differently. And, more important, each of these countries is taking different steps to tackle the crisis and has information as to what is going on at the local level that global investors likely know little about. One might ask therefore: are we seeing these different issuers, who the market has been showering with billions of dollars in lending, disclose the kind of detailed information as to their responses to the pandemic and how they are going to get out from under it that investors would like to have? For sovereigns, there is no mandatory requirement that they disclose anything on the matter of pandemic responses, so what we are talking about is their voluntary disclosure. Let us take the example of Brazil. It issued $3.5 billion in sovereign bonds in the international markets a few weeks ago. That Brazil was able to place such a large issuance in the context of the pandemic is particularly noteworthy since its government’s response to the pandemic is widely considered to be among the most disastrous in the world. One might think though that perhaps, in order to persuade investors to give it these billions, Brazil’s leading public health expert will have prepared detailed explanations for how and why the","PeriodicalId":43720,"journal":{"name":"Capital Markets Law Journal","volume":"15 1","pages":"259 - 261"},"PeriodicalIF":0.7,"publicationDate":"2020-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1093/cmlj/kmaa014","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46699779","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}
Bart Garré, Michael Voisin, R. Hay, Sophia Le Vesconte
{"title":"A vision for regulated digital security infrastructure in Europe","authors":"Bart Garré, Michael Voisin, R. Hay, Sophia Le Vesconte","doi":"10.1093/cmlj/kmaa012","DOIUrl":"https://doi.org/10.1093/cmlj/kmaa012","url":null,"abstract":"","PeriodicalId":43720,"journal":{"name":"Capital Markets Law Journal","volume":"15 1","pages":"298-321"},"PeriodicalIF":0.7,"publicationDate":"2020-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1093/cmlj/kmaa012","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47071849","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}
{"title":"The reform of the ESM and why it is so controversial in Italy","authors":"Giampaolo Galli","doi":"10.1093/cmlj/kmaa011","DOIUrl":"https://doi.org/10.1093/cmlj/kmaa011","url":null,"abstract":"","PeriodicalId":43720,"journal":{"name":"Capital Markets Law Journal","volume":"7 1","pages":"262-276"},"PeriodicalIF":0.7,"publicationDate":"2020-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138540236","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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