European Business Organization Law Review最新文献

This paper discusses various aspects of equivalence and (re)location issues in relation to central counterparties (‘CCPs’). We will inevitably focus on the consequences of Brexit for the position of the London-based CCPs and the potential impact thereof on the derivatives clearing landscape in the European Union (‘EU’). We will first describe the regime applicable to CCPs under the 2012 EMIR regime. This is followed by an introduction to EMIR 2.2 and the tiering of third-country CCPs. Subsequently, we will review the ESMA assessment of substantially systemically important clearing services and summarise the EMIR 3.0 proposal and its implications. Subsequently, the potential impact of the imposition of a location policy will be addressed. Finally, we will comment on how the European regime applicable to CCPs aligns with what may be referred to as the ‘international legal order’ providing the regulatory parameters within which cross-border clearing services may be conducted. We contend that imposing additional requirements for Tier 2 CCPs and the implementation of a (partial) location policy could prove to be regulatory ‘bazookas’. Acting in breach of the international order of mutual recognition and deference could well backfire to the detriment of the European clearing industry.

Abstract

While equivalence decisions are a well-known feature of EU/EEA financial regulation, EU/EEA regulatory law has not yet introduced FinTech-specific equivalence assessments. This article develops a new policy approach that allows to build on the tied-agent concept and extends it to third-country FinTechs in accordance with equivalence principles. This new regime is built on the premise that, within its scope, third-country FinTechs should only be granted market access to an EU/EEA Member State if the advantages of granting such access are so great that they can compensate for the possible risks of reduced direct access by the competent supervisory authorities in the EU/EEA to third-country FinTechs. This requires a substantial interest in the promotion of the corresponding technical solution of the third-country FinTech in connection with the provision of regulated services in an EU/EEA Member State, provided that the European Commission has adopted an equivalence decision with regard to the FinTech’s home country, the FinTech acts as a tied agent of an EU/EEA-based investment firm or credit institution, and the supervisory authority competent for the supervision of such investment firm or credit institution has entered into a cooperation agreement with the competent supervisory authority of the FinTech’s home country.

The concept of equivalence is present in various forms in the Solvency II framework, the EU prudential regulatory framework for insurance and reinsurance. While equivalence in Solvency II does not grant, or should not be equated to, market access for market participants that make use of the equivalence instruments within Solvency II, equivalence plays an important role in insurance, in particular in the solvency capital calculation at group level, in group supervision and for the recognition of reinsurance under Solvency II. The conclusion can be drawn that equivalence is an essential building block of the current framework. The application of equivalence in the framework and in practice is discussed in this contribution, and while the application might be complex, it is indispensable. At the same time, other mechanisms, either within the Solvency II framework or more broadly at international level, influence the current state and might affect the evolution of equivalence going forward. While, inherently, there is a political component to equivalence as well, the instruments remain firmly based in (detailed) Solvency II rules and are applied accordingly in practice.

This article examines the setting of the legal regime governing third country access to the UK financial market, in light of the political, market, and legal disruption associated with the UK withdrawal from the EU. It considers the UK reform context and the priority being given to securing UK financial market competitiveness, identifies a related and significant liberalization of the third country regime, and examines the implications for the UK, the EU, and for international financial market access.

This paper discusses the role of the third-country regime and equivalence from the Swiss perspective. It provides an analysis of the evolution of the Swiss approach. The various reactions to EU developments have ranged from the attempt to implement a reciprocity principle, to the resort to unilateral recognition. An overarching purpose of the Swiss equivalence framework has consisted of the relentless pursuit of a competitiveness objective. Yet the decline of equivalence as a market access mechanism has led to favouring other market access routes. This paper concludes that the recent reforms have initiated a roadmap towards an increasing autonomy of Swiss financial market law.

The EU and the US are more similar than they are different in their approach to equivalence. The world of derivatives is where the equivalence approach is most developed in the US, although in the US, equivalence is referred to as substituted compliance and is found only after a determination that the foreign regulatory regime is comparable to that in the US. US substituted compliance has been developed through the regulatory process, meaning that it is subject to continued development and could change over time at the whim of the regulators who are then in charge. In the case of credit institutions (EU) or commercial/retail banking (US), both the EU and the US largely follow an extra-territorial or territorial approach applying national law to a branch of a foreign entity doing business in the US (the extra-territorial approach) or requiring that a US subsidiary or intermediate holding company be established that is fully subject to US law (the territorial approach). In the provision of investment services, equivalence may theoretically be used to determine whether a third-country firm may offer investment services without a branch throughout the EU. As a practical matter, the only way to access the EU internal market is through a subsidiary established in a Member State (the territorial approach). A few broker-dealer activities may be conducted by foreign firms in the US without registering with the US Securities and Exchange Commission (SEC), but otherwise foreign firms must register with the SEC and become a member of the Financial Industry Regulatory Authority (FINRA) self-regulatory organization to engage in underwriting, private placement, and mergers and acquisitions advisory services.

This paper will examine the sustainability of directors’ duties from two perspectives, namely that the duties are stable in their own right and that they cover enough ground for them to help achieve sustainable goals. First, we will examine how directors’ duties to act in a company’s best interest operate well when shareholder interests are aligned. These duties, when breached, can be ratified by shareholders given the traditional understanding that they are the company. This may, in turn, have been associated with the growing acceptance of shareholder primacy over the past 40 years, seen most recently in the UK Supreme Court decision in BTI v Sequana (2022). The Supreme Court, however, also discussed the limitations of shareholder ratification, and its interaction with the rules protecting creditors, particularly as regards capital maintenance. Those rules have, however, been weakened, and private law has had to step in to address the abuse those rules were aimed at. Where the substantive content of directors’ duties is concerned, the focus everywhere is on how to make directors take account of external constraints such as environmental, social and governance (ESG) concerns and corporate purposes that may contradict enhancing shareholder value (as well as existing shareholder protection) as an established paradigm of company law. We will also analyse the difficulties in accommodating the interests of other internal constituents, like creditors (some of whom may have been externalised). This paper will build on earlier suggestions that the proper purpose rule has a part to play in balancing the interests of corporate constituents both inter and intra se and even in considering the position of future shareholders. The test of what is in the best interest of the company may not provide enough balance in this regard, as seen perhaps from the recent failed derivative action sought by some shareholders of Shell against its directors, and directors should take account of the interest of the reasonable shareholder in capturing the gist of what ESG should aim at.

When the Polish financial market supervisor Komisja Nadzoru Finansowego (KNF) notified its intention to prohibit certain unit-linked insurance products marketed in Poland, it created an unprecedented situation: for the first time, a financial market supervisor decided to trigger Chapter III of the PRIIPs Regulation and adopt product intervention measures in the insurance sector. If adopted, these measures would regulate not only the investment strategies of unit-linked insurance products offered in Poland, but also their cost structure and terms and conditions. Is such far-reaching product intervention in compliance with the requirements of the PRIIPs Regulation? The European Insurance and Occupation Pensions Authority (EIOPA) tried to answer this question in its opinion on the justification and proportionality of the notified measures. The aim of this contribution is to critically analyse EIOPA’s opinion and explain the legal and practical ramifications of its findings. In particular, this article argues that despite its soft law nature and weaknesses of some of its findings, EIOPA’s opinion constitutes a major regulatory development in the insurance sector and raises several fundamental questions about the place of product intervention in the EU system of investor protection.