scholarly journals Blockchain Technology and Financial Regulation: A Risk-Based Approach to the Regulation of ICOs

2019 ◽  
Vol 10 (2) ◽  
pp. 263-314 ◽  
Author(s):  
Alexis COLLOMB ◽  
Primavera DE FILIPPI ◽  
Klara SOK
Keyword(s):  
Initial Public Offerings ◽  
Financial Regulation ◽  
Regulatory Framework ◽  
Functional Equivalence ◽  
Public Offerings ◽  
Blockchain Technology ◽  
Equity Crowdfunding ◽  
The Us ◽  
Securities Laws ◽  
Initial Coin Offerings

This paper compares Initial Public Offerings (IPOs) and equity crowdfunding with Initial Coin Offerings (ICOs) and explores the corresponding risks and limitations of these different fundraising practices, with a view to analysing the extent to which the latter should be subject to the same regulatory framework as the former. After assessing the underlying principles and current regulatory framework for IPOs and equity crowdfunding, with a focus on Europe and the US, we investigate the possibility of applying existing financial regulations to ICOs. Drawing from the notion of “functional equivalence”, we contend that many ICOs share a sufficient number of similarities with traditional IPOs and equity crowdfunding, to be regulated in a similar manner. However, given the various attempts by token issuers to escape from the scope of securities laws by assigning a different function to their ICOs tokens, we argue that principle-based regulation based on an in-depth risk-analysis could be an effective way of addressing the regulation of ICOs, thereby moving from “functional equivalence” to “risk equivalence”. Finally, we explore the use of blockchain technology as a regulatory technology, incorporating specific rules and constraints into the technological fabric of an ICO, in order to ensure compliance with the fundamental principles of financial regulation.

The Oxford Handbook of IPOs

2018 ◽  
Keyword(s):  
United States ◽  
Initial Public Offerings ◽  
Financial Regulation ◽  
Large Body ◽  
Public Information ◽  
The United States ◽  
Minimum Size ◽  
Stock Exchanges ◽  
Public Offerings ◽  
Firm’S Life Cycle

Firms generally begin as privately owned entities. When they grow large enough, the decision to go public and its consequences are among the most crucial times in a firm’s life cycle. The first time a firm is a reporting issuer gives rise to tremendous responsibilities about disclosing public information and accountability to a wide array of retail shareholders and institutional investors. Initial public offerings (IPOs) offer tremendous opportunities to raise capital. The economic and legal landscape for IPOs has been rapidly evolving across countries. There have been fewer IPOs in the United States in the aftermath of the 2007–2009 financial crisis and associated regulatory reforms that began in 2002. In 1980–2000, an average of 310 firms went public every year, while in 2001–2014 an average of 110 firms went public every year. At the same time, there are so many firms that seek an IPO in China that there has been a massive waiting list of hundreds of firms in recent years. Some countries are promoting small junior stock exchanges to go public early, and even crowdfunding to avoid any prospectus disclosure. Financial regulation of analysts and investment banks has been evolving in ways that drastically impact the economics of going public—in some countries, such as the United States, drastically increasing the minimum size of a company before it can expect to go public. This Handbook not only systematically and comprehensively consolidates a large body of literature on IPOs, but provides a foundation for future debates and inquiry.

Initial public offerings: evidence from the UK

2004 ◽  
Vol 30 (1) ◽  
pp. 46-62 ◽  
Author(s):  
Ashley Burrowes ◽  
Kevin Jones
Keyword(s):  
Initial Public Offerings ◽  
Stock Exchange ◽  
Due Diligence ◽  
London Stock Exchange ◽  
Public Offerings ◽  
The Us ◽  
The Uk ◽  
High Level ◽  
Alternative Investment

This investigation into the performance of Initial Public Offerings on the new Alternative Investment Market reveals that the expected high level of underpricing, that is usually associated with the risky nature of small, young and growing companies, is not supported by the evidence in this study. Raw and market adjusted figures reveal that IPOs listed on AIM at the London Stock Exchange appear to be only conservatively mispriced when contrasted to main board IPO listings in the US, UK and other countries. Due diligence listing requirements could be offsetting the otherwise risky nature of these small, young and growing companies. Finally AIM is discussed in terms of meeting its own targets and its ability to attract international listings.

scholarly journals Trends in IPOs: The Evidence From Financial Markets

Equilibrium ◽  
2013 ◽  
Vol 8 (2) ◽  
pp. 45-63
Author(s):  
Tomas Meluzin ◽  
Marek Zinecker
Keyword(s):  
Emerging Markets ◽  
Initial Public Offerings ◽  
Secondary Data ◽  
Public Offerings ◽  
Developed Economies ◽  
Corporate Growth ◽  
World Markets ◽  
The Us ◽  
The World ◽  
European Markets

This paper deals with the analysis of initial public offerings of shares in terms of their quantity and the amount of capital raised by this form of financing on the world markets. Relevant global developments will be analyzed first, followed by a description of regional situation. The analysis is based on secondary data which are processed by descriptive statistics methods. The analysis of IPO trends on the world markets indicates that, in the period of 2004-2007, IPO-based financing of corporate growth gained in importance on both developed and emerging markets. The IPO segment was dominated by the largest emerging markets (Brazil, Russia, India and China) and at the same time the US American and Western European markets decline in their importance. The world-wide economic crisis of 2008 suppressed the interest in new IPOs, particularly in the developed economies. As the economy of most countries is beginning to revive, the interest in the IPO approach from businesses and investors is on the rise. It can be expected that, in the next few years, the arena of initial public offerings will be dominated by visionary companies operating on emerging markets where the execution of an IPO will constitute the key element in securing the capital essential for further expansion.

IPO Pricing Mechanisms in the Presence of When-Issued Markets

2014 ◽  
Vol 04 (03) ◽  
pp. 1450016
Author(s):  
Pegaret Pichler ◽  
Alex Stomper
Keyword(s):  
Initial Public Offerings ◽  
Trading Rules ◽  
Public Offerings ◽  
Optimal Mechanism ◽  
The Us ◽  
Ipo Pricing

In some countries, it is common that initial public offerings (IPOs) are preceded by forward ("when-issued") trading of the shares; in the US, such trading is prohibited. We analyze the effect of when-issued trading on the pricing and allocation of IPO shares. We demonstrate that the optimal selling mechanism in the presence of when-issued trading differs qualitatively from the optimal mechanism if such trading is prohibited. Furthermore we show that trading rules in the when-issued market can be designed so that allowing when-issued trading results in an increase in expected issue proceeds.

scholarly journals Manufacturing Startups

2013 ◽  
Vol 135 (11) ◽  
pp. 36-41
Author(s):  
Elisabeth B. Reynolds ◽  
Hiram Samel
Keyword(s):  
United States ◽  
Initial Public Offerings ◽  
Scale Up ◽  
The United States ◽  
Market Demand ◽  
Public Offerings ◽  
Us Economy ◽  
Research Investment ◽  
The Us ◽  
Stage Development

This article analyses the reasons and impact of shift of manufacturing startups from the United States to overseas. After years of refining prototypes and perfecting pilot plants, advanced manufacturing startups frequently look overseas when it is time to scale-up for commercial production. Both manufacturing and technology companies go abroad looking for partnerships, because it is easier for investors. When startups scale their manufacturing elsewhere, the United States loses more than a possible return on the research investment that made such breakthroughs possible. The preliminary research suggests that to fully realize the economic gains associated with innovation, new products and services developed by American innovators must be scaled-up within the US economy, as well as in overseas markets. The four suggestions that have been made include the following: increase financing options for later-stage development; create institutions and incentives; change the contours of market demand; and encourage firms to raise capital through initial public offerings.

Early wealth effects of regional ADRs

2015 ◽  
Vol 11 (2) ◽  
pp. 198-214 ◽  
Author(s):  
Mark Schaub
Keyword(s):  
Initial Public Offerings ◽  
Latin American ◽  
Seasoned Equity Offerings ◽  
Wealth Effects ◽  
Equity Offerings ◽  
Short Term ◽  
Content Type ◽  
Public Offerings ◽  
Market Index ◽  
The Us

Purpose – The purpose of this paper is to determine what types of short-term wealth effects accrued to European and Latin American American Depository Receipt (ADR) investors and whether these were affected by the type of issue (initial public offerings (IPO) vs seasoned equity offerings (SEO)) or the date of issue (1990s vs 2000s). Design/methodology/approach – Standard ADR and IPO excess return methodology is utilized to compute and test excess returns against a US investment benchmark. This methodology is used in many ADR and IPO studies. Findings – European SEOs listed in the 2000s did better than those listed in the 1990s. The results for European IPOs were the opposite. Latin American SEOs did better relative to the US market index for issues listed in the 1990s as compared to those listed in the 2000s. Once again the results for Latin American IPOs were the opposite. Originality/value – This study differs from previous studies by emphasizing differences in short-term return behaviour for Latin American and European ADRs listed during a decade of US market stability (the 1990s) vs those listed in the 2000s when the US stock market encountered times of extreme return volatility. These timing differences affect not only the returns of all the ADRs but also show how ADR IPOs and SEOs tend to have opposite return behaviour based on timing. These return differences are important because the major benefits of portfolio diversification are achieved when asset returns are less correlated with each other.

scholarly journals Financial Regulation: Still Unsettled a Decade After the Crisis

2019 ◽  
Vol 33 (1) ◽  
pp. 61-80 ◽  
Author(s):  
Daniel K. Tarullo
Keyword(s):  
Financial Stability ◽  
Financial Regulation ◽  
Legal Framework ◽  
Regulatory Framework ◽  
The Political ◽  
Shadow Banking ◽  
Unfinished Business ◽  
Short Term ◽  
The Us ◽  
The Moment

A decade after the darkest moments of the financial crisis, both the US financial system and the legal framework for its regulation are still in flux. The post-crisis regulatory framework has made systemically important banks much more resilient. They are substantially better capitalized and less dependent on runnable short-term funding. But the current regulatory framework does not deal effectively with threats to financial stability outside the perimeter of regulated banking organizations, notably from forms of shadow banking. Moreover, with the political tide having for the moment turned decisively toward deregulation, there is some question whether the resiliency improvements of the largest banks will be preserved. This article assesses the accomplishments, unfinished business, and outstanding issues in the post-crisis approach to prudential regulation.

scholarly journals Initial Coin Offerings (ICOs): the importance of human capital

2021 ◽  
Author(s):  
José Campino ◽  
Ana Brochado ◽  
Álvaro Rosa
Keyword(s):  
Human Capital ◽  
Initial Public Offerings ◽  
Econometric Model ◽  
Disruptive Technology ◽  
Capital Theory ◽  
Public Offerings ◽  
Perceived Impact ◽  
Indicators Of Success ◽  
The Impact ◽  
Initial Coin Offerings

Abstract The Initial Coin Offerings (ICOs) subject has been gaining relevance due to its novelty, due to the capital amounts involved in the projects, as well as the disruptive technology and methods involved. ICOs are a disruptive way to finance new projects which involve high risks and which are mainly technological. This way to finance a project has been compared to others, namely, crowdfunding, venture capital or Initial Public Offerings (IPOs). Nevertheless, ICOs have very specific characteristics which make them unique. We have studied the ICO projects and developed a literature review on the topic. Building on the Human Capital Theory (HCT), we have also studied the importance given to the project’s team and its perceived impact on projects’ success. Our contribution to fill in this literature gap was to develop an econometric model which measures the impact of team’s characteristics on the success of a project. The database was collected with the combination of two data sources and is composed of 3158 profiles and 340 ICO projects. We have concluded that team variables are significant contributors to project’s success. Our data suggests that people’s location contributes to projects’ success as well as promoters’ networks. The ratings attributed by external parties to the project are also indicators of success. Several control variables such as the implementation of thresholds to investment, the number of currencies accepted, the platform in which the ICO is developed, the existence of bonus schemes and the year of the project were found to be statistically significant having an impact on projects’ outcome.

Vietnam's latest SOE reform push will see some success

2015 ◽  
Keyword(s):  
Free Trade ◽  
Initial Public Offerings ◽  
Foreign Investment ◽  
Public Debt ◽  
Corporate Sector ◽  
Economic Dependence ◽  
Content Type ◽  
Public Offerings ◽  
Core Business ◽  
The Us

Significance Vietnamese public debt levels and membership conditions attached to the US-led Trans-Pacific Partnership (TPP) free trade scheme are necessitating this intensification. Impacts Larger SOEs will launch initial public offerings to attract strategic investors. Reining back of SOEs into their 'core' business areas will accelerate. Vietnam's economic dependence on the foreign-invested corporate sector, particularly for export earnings, will increase. Foreign investment inflows will probably rise.

Going public in interwar Britain

2010 ◽  
Vol 17 (1) ◽  
pp. 51-71 ◽  
Author(s):  
David Chambers
Keyword(s):  
Initial Public Offerings ◽  
Financial Regulation ◽  
Capital Expenditure ◽  
Stock Exchange ◽  
Survival Rates ◽  
Order Theory ◽  
Pecking Order ◽  
Going Public ◽  
Pecking Order Theory ◽  
Public Offerings

Utilising a new sample of interwar initial public offerings (IPOs), I consider the effectiveness of the interwar stock market for firms going public. Consistent with the pecking order theory, IPO proceeds contributed only modestly to domestic industry's capital expenditure needs. IPOs of capital-hungry new manufacturing industries raised no more finance than did the rest of manufacturing. This was in part attributable to the detrimental effect of weak financial regulation on investor appetite for newer, riskier enterprises. In terms of the quality of firms allowed onto the market, IPO survival rates of the early and late 1920s were shockingly low, just as earlier research has shown. However, survival rates rebounded strongly in the following decade due not only to the economic recovery but also to tougher scrutiny of listing applications by the London Stock Exchange.

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