1This article is the first to consider the variations in governance requirements applicable to European financial market infrastructures. It charts the tangled combination of laws, codes and regulations that apply to the governance of the largest European central counterparties, central securities depositories, and international central securities depositories. Despite the similarity of these institutions in terms of their sector, criticality, complexity and purpose, there are substantive variations in what is required of their governance. Here we question whether this variance is an appropriate reflection of differing institutional needs or a by-product of piecemeal regulatory reform.Our research found no apparent need to regulate for consistency of board size or structure, nor in relation to specificities of committee requirements. However, there are convincing arguments that change is needed around the meaning and application of independence. The current approach to FMI directorial independence is a poor fit given the sectors highly technical nature, its interconnectedness, and the limited pool of available expertise. On top of this, expertise, diversity, and commitment can become trade-offs for adherence to the requirements of independence. We argue that regulation needs to be sensitively calibrated to ensure these important factors do not get squeezed out under the weight of formalized independence. It is our view that independence requirements can be structured to create better balanced boards where the needs of independence, expertise, diversity, and commitment can be weighed against each other in context.
{"title":"The Regulation of Corporate Governance in European Financial Market Infrastructures: A Critique","authors":"Eilís Ferran, Eleanore Hickman","doi":"10.1515/ecfr-2024-0001","DOIUrl":"https://doi.org/10.1515/ecfr-2024-0001","url":null,"abstract":"<jats:target target-type=\"next-page\">1</jats:target>This article is the first to consider the variations in governance requirements applicable to European financial market infrastructures. It charts the tangled combination of laws, codes and regulations that apply to the governance of the largest European central counterparties, central securities depositories, and international central securities depositories. Despite the similarity of these institutions in terms of their sector, criticality, complexity and purpose, there are substantive variations in what is required of their governance. Here we question whether this variance is an appropriate reflection of differing institutional needs or a by-product of piecemeal regulatory reform.Our research found no apparent need to regulate for consistency of board size or structure, nor in relation to specificities of committee requirements. However, there are convincing arguments that change is needed around the meaning and application of independence. The current approach to FMI directorial independence is a poor fit given the sectors highly technical nature, its interconnectedness, and the limited pool of available expertise. On top of this, expertise, diversity, and commitment can become trade-offs for adherence to the requirements of independence. We argue that regulation needs to be sensitively calibrated to ensure these important factors do not get squeezed out under the weight of formalized independence. It is our view that independence requirements can be structured to create better balanced boards where the needs of independence, expertise, diversity, and commitment can be weighed against each other in context.","PeriodicalId":54052,"journal":{"name":"European Company and Financial Law Review","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2024-05-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141150121","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}
39While corruption in the public sphere has traditionally been socially and legally reproached, private corruption has not. In the private sphere, the violation by a decision-maker of his or her positional duties in exchange for receiving an extra-positional benefit has not always been seen as conduct that should be prosecuted by law. However, this has changed in recent times and within the field of company law the prohibition of receiving external remuneration has emerged as one of the manifestations of the directors’ duty of loyalty. This paper examines both the basis and the elements of the prohibition and questions how far it should extend. In this sense, although it shares the convenience of enshrining the prohibition in law, it also warns about the dangers of an excessive extension of the prohibition of receiving external remuneration.
{"title":"Duty of Loyalty: Corruption of Company Directors and Prohibition of External Remuneration","authors":"Irene Navarro Frías","doi":"10.1515/ecfr-2024-0002","DOIUrl":"https://doi.org/10.1515/ecfr-2024-0002","url":null,"abstract":"<jats:target target-type=\"next-page\">39</jats:target>While corruption in the public sphere has traditionally been socially and legally reproached, private corruption has not. In the private sphere, the violation by a decision-maker of his or her positional duties in exchange for receiving an extra-positional benefit has not always been seen as conduct that should be prosecuted by law. However, this has changed in recent times and within the field of company law the prohibition of receiving external remuneration has emerged as one of the manifestations of the directors’ duty of loyalty. This paper examines both the basis and the elements of the prohibition and questions how far it should extend. In this sense, although it shares the convenience of enshrining the prohibition in law, it also warns about the dangers of an excessive extension of the prohibition of receiving external remuneration.","PeriodicalId":54052,"journal":{"name":"European Company and Financial Law Review","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2024-05-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141153759","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}
67Within the European Member States, it should now be possible to establish a limited liability company fully online. This study compares how the Directive which mandates online formation, has been implemented in the Netherlands, Belgium, and Germany. In particular, it examines whether and, if so, how these countries approach the various cybersecurity risks involved in online formation. The Directive considers these cybersecurity risks, however, the focus is mainly on the requirements regarding the availability of online formation and to a lesser extent the requirements pertaining to the authentication of the founders, as well as the authenticity and integrity of electronic documents. The primary emphasis of the Directive is strongly placed on achieving the objective of facilitating easier, quicker, and more time- and cost-effective company formation. The approach taken by the Netherlands, Belgium, and Germany in implementing the Directive and enabling online formation demonstrates a notable level of similarity. All have made sure to safeguard the traditional role of notaries in company formation in these countries. Despite the Directive’s emphasis on availability, the primary concern for these Member States lies in ensuring the security of online formation. All impose strict requirements regarding cybersecurity and opted for the highest standards regarding authentication (assurance level ‘high’) and authenticity (qualified electronic signatures).
{"title":"Cybersecurity and Online Formation of Companies in the Netherlands, Belgium, and Germany","authors":"Tom Salemink, Pieter Wolters, Hans De Wulf","doi":"10.1515/ecfr-2024-0003","DOIUrl":"https://doi.org/10.1515/ecfr-2024-0003","url":null,"abstract":"<jats:target target-type=\"next-page\">67</jats:target>Within the European Member States, it should now be possible to establish a limited liability company fully online. This study compares how the Directive which mandates online formation, has been implemented in the Netherlands, Belgium, and Germany. In particular, it examines whether and, if so, how these countries approach the various cybersecurity risks involved in online formation. The Directive considers these cybersecurity risks, however, the focus is mainly on the requirements regarding the availability of online formation and to a lesser extent the requirements pertaining to the authentication of the founders, as well as the authenticity and integrity of electronic documents. The primary emphasis of the Directive is strongly placed on achieving the objective of facilitating easier, quicker, and more time- and cost-effective company formation. The approach taken by the Netherlands, Belgium, and Germany in implementing the Directive and enabling online formation demonstrates a notable level of similarity. All have made sure to safeguard the traditional role of notaries in company formation in these countries. Despite the Directive’s emphasis on availability, the primary concern for these Member States lies in ensuring the security of online formation. All impose strict requirements regarding cybersecurity and opted for the highest standards regarding authentication (assurance level ‘high’) and authenticity (qualified electronic signatures).","PeriodicalId":54052,"journal":{"name":"European Company and Financial Law Review","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2024-05-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141150119","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}
104Recapitalisation of banks, as well as the whole banking resolution process, was fully public during the 2008 financial crisis. The Single Resolution Mechanism shifted from this approach and created a public-private system, where private individuals and entities can be called in to fund recapitalisation (bail-in). This article argues that recapitalisation (and banking resolution as a whole) should be fully public so it can be rapid, negotiation-free, and in the best interest of the State. The 2008 Irish recapitalisation illustrates well the rewards of having public recapitalisation, while it also tells where improvements are needed to protect recapitalisation process and taxpayers. Currently, the Single Resolution Mechanism has different recapitalisation methods, which creates some complexity and overlaps.
{"title":"The Strategic Importance of Public Recapitalisation in Banking Resolution, What Ireland Can Tell","authors":"Elise Lefeuvre","doi":"10.1515/ecfr-2024-0004","DOIUrl":"https://doi.org/10.1515/ecfr-2024-0004","url":null,"abstract":"<jats:target target-type=\"next-page\">104</jats:target> <jats:italic>Recapitalisation of banks, as well as the whole banking resolution process, was fully public during the 2008 financial crisis. The Single Resolution Mechanism shifted from this approach and created a public-private system, where private individuals and entities can be called in to fund recapitalisation (bail-in). This article argues that recapitalisation (and banking resolution as a whole) should be fully public so it can be rapid, negotiation-free, and in the best interest of the State. The 2008 Irish recapitalisation illustrates well the rewards of having public recapitalisation, while it also tells where improvements are needed to protect recapitalisation process and taxpayers. Currently, the Single Resolution Mechanism has different recapitalisation methods, which creates some complexity and overlaps. </jats:italic>","PeriodicalId":54052,"journal":{"name":"European Company and Financial Law Review","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2024-05-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141150098","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}
936European prudential regulation imposes significant compliance costs on banks, justifying extensive use of proportionality. However, the failure of Silicon Valley Bank raised numerous objections to this approach. According to many scholars and practitioners, the crisis of SBV originated from a substantial loosening of the regulatory standards and the corresponding supervisory enforcement. In this context, the article discusses the intricate relations between proportionality and financial stability, reaching an articulated conclusion. While concerning prudential capital requirements it seems reasonable to adopt a uniform discipline, as to supervision (e. g., SREP), a proportional approach seems more appropriate. At the same time, the failure of SVB advocates in favor of a partly different approach toward corporate governance.
{"title":"Proportionality in the European Banking Law.Lessons from Silicon Valley Bank","authors":"Matteo Arrigoni, Enrico Rino Restelli","doi":"10.1515/ecfr-2023-0031","DOIUrl":"https://doi.org/10.1515/ecfr-2023-0031","url":null,"abstract":"<jats:target target-type=\"next-page\">936</jats:target>European prudential regulation imposes significant compliance costs on banks, justifying extensive use of proportionality. However, the failure of Silicon Valley Bank raised numerous objections to this approach. According to many scholars and practitioners, the crisis of SBV originated from a substantial loosening of the regulatory standards and the corresponding supervisory enforcement. In this context, the article discusses the intricate relations between proportionality and financial stability, reaching an articulated conclusion. While concerning prudential capital requirements it seems reasonable to adopt a uniform discipline, as to supervision (e. g., SREP), a proportional approach seems more appropriate. At the same time, the failure of SVB advocates in favor of a partly different approach toward corporate governance.","PeriodicalId":54052,"journal":{"name":"European Company and Financial Law Review","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2024-02-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139977952","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}
Anna Moszyńska, Aleksandra Sikorska-Lewandowska, Mariusz T. Kłoda
866The Polish regulation concerning a limited joint-stock partnership has been in force since the date of entry into force of the Commercial Companies Code (CCC). The CCC divides commercial companies into “partnerships” and “capital companies”. Each of those two types of commercial companies is governed by separate rules. The completion of twenty years of Polish CCC in force prompts us to analyse the juridical model adopted by the legislature, according to which limited joint-stock partnership is classified as a partnership. During this period, there have been significant events making the verification of the validity of this model possible, including Poland’s accession to the European Union (EU), which has resulted in the need to adapt national regulations to EU law – both in the field of private law (including commercial law) and public law (including tax law). The need to amend the domestic law in connection with the implementation of Directive (EU) 2019/2121 of the European Parliament and of the Council of November 27, 2019 amending Directive (EU) 2017/1132 (as regards cross-border conversions, mergers, and divisions of companies) – is a direct motivation for undertaking research on a Polish limited joint-stock partnership.867
{"title":"The Polish Model of a Limited Joint-Stock Partnership in Comparison with Other European Legal Systems","authors":"Anna Moszyńska, Aleksandra Sikorska-Lewandowska, Mariusz T. Kłoda","doi":"10.1515/ecfr-2023-0036","DOIUrl":"https://doi.org/10.1515/ecfr-2023-0036","url":null,"abstract":"<jats:target target-type=\"next-page\">866</jats:target>The Polish regulation concerning a limited joint-stock partnership has been in force since the date of entry into force of the Commercial Companies Code (CCC). The CCC divides commercial companies into “partnerships” and “capital companies”. Each of those two types of commercial companies is governed by separate rules. The completion of twenty years of Polish CCC in force prompts us to analyse the juridical model adopted by the legislature, according to which limited joint-stock partnership is classified as a partnership. During this period, there have been significant events making the verification of the validity of this model possible, including Poland’s accession to the European Union (EU), which has resulted in the need to adapt national regulations to EU law – both in the field of private law (including commercial law) and public law (including tax law). The need to amend the domestic law in connection with the implementation of Directive (EU) 2019/2121 of the European Parliament and of the Council of November 27, 2019 amending Directive (EU) 2017/1132 (as regards cross-border conversions, mergers, and divisions of companies) – is a direct motivation for undertaking research on a Polish limited joint-stock partnership.<jats:target target-type=\"next-page\">867</jats:target>","PeriodicalId":54052,"journal":{"name":"European Company and Financial Law Review","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2024-02-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139977893","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}
794The article addresses the issue that is widely discussed in Germany and other jurisdictions: can the management of a company use AI applications in its decision-making process without violating its fiduciary duties? The lack of transparency in conventional AI applications conflicts with the fiduciary duty to check the plausibility of external expert advice (in Germany known as the ISION principles). This tension can be partly resolved by using explainable AI (XAI). In this work, we review the basic principles of machine learning and XAI and discuss them in the legal context.
{"title":"The Management and the Advice of (Un)Explainable AI","authors":"Elena Dubovitskaya, Annika Buchholz","doi":"10.1515/ecfr-2023-0033","DOIUrl":"https://doi.org/10.1515/ecfr-2023-0033","url":null,"abstract":"<jats:target target-type=\"next-page\">794</jats:target>The article addresses the issue that is widely discussed in Germany and other jurisdictions: can the management of a company use AI applications in its decision-making process without violating its fiduciary duties? The lack of transparency in conventional AI applications conflicts with the fiduciary duty to check the plausibility of external expert advice (in Germany known as the ISION principles). This tension can be partly resolved by using explainable AI (XAI). In this work, we review the basic principles of machine learning and XAI and discuss them in the legal context.","PeriodicalId":54052,"journal":{"name":"European Company and Financial Law Review","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2024-02-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139977882","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}
964The current EU regulatory regime of Central Counterparties (CCPs) falls short of addressing adequately the potential misalignment of incentives of CCPs’ shareholders on the one hand and clearing members on the other hand.Thus, according to the European Market Infrastructure Regulation (EMIR), while clearing members contribute substantially to the default waterfall of a CCP, they do not enjoy substantial governance rights: they merely participate in the risk committee of the CCP, whose role is only advisory.By contrast, although shareholders are vested with substantial governance rights, such as the right to appoint the members of the board which sets the CCP’s risk profile, they do not bear final losses first, as in ordinary companies: the shareholders’ contribution to a CCP’s default waterfall is limited and, in case the CCP enters resolution, they only bear losses, in principle, after the clearing members.It is however clear that when the owners of a firm are not the ones bearing the risks first, the firm may be inclined to excessive risk-taking. The objective of this article is therefore to discuss a number of ways to improve the corporate governance of CCPs, in particular the incentive setting for shareholders.965
{"title":"Does EU Regulation Adequately Address the Tension between CCPs Shareholders’ and Clearing Members’ Incentives?","authors":"Anastasia Sotiropoulou","doi":"10.1515/ecfr-2023-0038","DOIUrl":"https://doi.org/10.1515/ecfr-2023-0038","url":null,"abstract":"<jats:target target-type=\"next-page\">964</jats:target>The current EU regulatory regime of Central Counterparties (CCPs) falls short of addressing adequately the potential misalignment of incentives of CCPs’ shareholders on the one hand and clearing members on the other hand.Thus, according to the European Market Infrastructure Regulation (EMIR), while clearing members contribute substantially to the default waterfall of a CCP, they do not enjoy substantial governance rights: they merely participate in the risk committee of the CCP, whose role is only advisory.By contrast, although shareholders are vested with substantial governance rights, such as the right to appoint the members of the board which sets the CCP’s risk profile, they do not bear final losses first, as in ordinary companies: the shareholders’ contribution to a CCP’s default waterfall is limited and, in case the CCP enters resolution, they only bear losses, in principle, after the clearing members.It is however clear that when the owners of a firm are not the ones bearing the risks first, the firm may be inclined to excessive risk-taking. The objective of this article is therefore to discuss a number of ways to improve the corporate governance of CCPs, in particular the incentive setting for shareholders.<jats:target target-type=\"next-page\">965</jats:target>","PeriodicalId":54052,"journal":{"name":"European Company and Financial Law Review","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2024-02-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139977883","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}
887The paper presents the issue of openness and reliability of business registers maintained by the Member States of the European Union on the basis of acts that implement EU directives. The first part of the article presents the historical evolution of the provisions of EU law, while the second part focuses on the assessment of regulations currently in force. On this basis, in the third part of the article, the author carries out an analysis of how EU regulations are implemented in national laws in the context of openness and reliability of registers, with a particular focus on Polish law and references to the implementation methods adopted in other selected Member States. Based on this comparative analysis, the author ultimately comes to the conclusion that the general direction adopted in EU law is correct, but Polish domestic law is burdened with flaws, indicating low efficiency of implementation of EU law. Thus, the author makes suggestions as to the possible directions of development of domestic law, and to some extent also in relation to EU law.
{"title":"Implementation of the Provisions of Directive 2017/1132 on Openness and Reliability of Registers in Poland and Other Selected EU Countries","authors":"Konrad Garnowski","doi":"10.1515/ecfr-2023-0037","DOIUrl":"https://doi.org/10.1515/ecfr-2023-0037","url":null,"abstract":"<jats:target target-type=\"next-page\">887</jats:target>The paper presents the issue of openness and reliability of business registers maintained by the Member States of the European Union on the basis of acts that implement EU directives. The first part of the article presents the historical evolution of the provisions of EU law, while the second part focuses on the assessment of regulations currently in force. On this basis, in the third part of the article, the author carries out an analysis of how EU regulations are implemented in national laws in the context of openness and reliability of registers, with a particular focus on Polish law and references to the implementation methods adopted in other selected Member States. Based on this comparative analysis, the author ultimately comes to the conclusion that the general direction adopted in EU law is correct, but Polish domestic law is burdened with flaws, indicating low efficiency of implementation of EU law. Thus, the author makes suggestions as to the possible directions of development of domestic law, and to some extent also in relation to EU law.","PeriodicalId":54052,"journal":{"name":"European Company and Financial Law Review","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2024-02-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139977894","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}
822In an ever more globalized financial market, investors are increasingly exposed to regulation and enforcement by multiple jurisdictions with varying rules, including different insider trading regimes. From a European perspective, potential exposure to the U. S. insider trading regime is particularly challenging. Especially for the non-U. S. practitioner, the U. S. insider prohibition is very complex and offers little legal certainty. And this uncertainty is all the more problematic for Europeans because the U. S. insider ban applies extraterritorially. Even more worrying, violations of the U. S. insider trading regime are often met with harsh consequences, ranging from stiff prison sentences to ruinous financial penalties. First, this article broadly outlines the contours of the U. S. insider trading regime as well as the current state of play for insider trading enforcement under U. S. law. Second, it outlines the fearsome (extra-) territorial reach of the U. S. insider trading ban, to allow a better assessment of a European’s potential exposure to the U. S. insider trading regime in different situations. Third, it highlights the main differences between the U. S. and the EU insider trading regulations, to identify the areas in which market participants on both sides of the Atlantic should be particularly cautious.
{"title":"U. S. vs. EU Insider Trading Regulation: Risks and Challenges from a European Perspective","authors":"Cédric Remund, Paul Tuchmann","doi":"10.1515/ecfr-2023-0032","DOIUrl":"https://doi.org/10.1515/ecfr-2023-0032","url":null,"abstract":"<jats:target target-type=\"next-page\">822</jats:target>In an ever more globalized financial market, investors are increasingly exposed to regulation and enforcement by multiple jurisdictions with varying rules, including different insider trading regimes. From a European perspective, potential exposure to the U. S. insider trading regime is particularly challenging. Especially for the non-U. S. practitioner, the U. S. insider prohibition is very complex and offers little legal certainty. And this uncertainty is all the more problematic for Europeans because the U. S. insider ban applies extraterritorially. Even more worrying, violations of the U. S. insider trading regime are often met with harsh consequences, ranging from stiff prison sentences to ruinous financial penalties. First, this article broadly outlines the contours of the U. S. insider trading regime as well as the current state of play for insider trading enforcement under U. S. law. Second, it outlines the fearsome (extra-) territorial reach of the U. S. insider trading ban, to allow a better assessment of a European’s potential exposure to the U. S. insider trading regime in different situations. Third, it highlights the main differences between the U. S. and the EU insider trading regulations, to identify the areas in which market participants on both sides of the Atlantic should be particularly cautious.","PeriodicalId":54052,"journal":{"name":"European Company and Financial Law Review","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2024-02-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139977663","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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