Part III Trading, 11 Governance and Organization of Trading Venues: The Role of Financial Market Infrastructure Groups

2017 ◽  
Author(s):  
Ferrarini Guido ◽  
Saguato Paolo
Keyword(s):  
Financial Markets ◽  
Financial Market ◽  
Financial Conglomerates ◽  
Current Regime ◽  
Regulated Markets ◽  
Financial Market Stability ◽  
Potential Risks ◽  
Market Infrastructure ◽  
The Eu

This chapter shows that MiFID II brings modest changes to trading venues in the EU: newly introduced Organized Trading Facilities (OTFs) will be the reference venues for a significant portion of derivatives trading; and regulated markets (RMs) and Multilateral Trading Facilities (MTFs) regimes have been aligned, with specific provisions to strengthen the governance of venues and operators. However, trading venues which have developed into Financial Markets Infrastructures (FMI) groups providing trading and post-trading services test the capacity of the current regime—and MiFID II itself—to oversee their activities and guarantee competition and stability. MiFID II does not explicitly take FMI groups into account; only three sets of rules address some of their potential risks. The authors conclude that this regulatory gap might threaten financial market stability, and regulators should consider a regulatory intervention, such as the experience of the regulatory and supervisory colleges of CCPs under EMIR and the regulatory framework of the financial conglomerates directive.

scholarly journals The Role of Political Risk and Financial Development Factors on Sukuk Market Development of Gulf Cooperation Council (GCC) Countries

2018 ◽  
Vol 10 (1) ◽  
pp. 242
Author(s):  
Arafat Mansoor Al-raeai ◽  
Zairy Zainol ◽  
Ahmad Khilmy Abdul Rahim
Keyword(s):  
Financial Markets ◽  
Financial Market ◽  
Financial Management ◽  
Political Risk ◽  
Gulf Cooperation Council ◽  
Market Development ◽  
Model Framework ◽  
Alternative Source ◽  
Gcc Countries

The literature related to the financial management acknowledges the significant role that political risk play to determine the financial market development. Further, financial system development (banking and financial markets) competes to provide long-term financing, and this competition might be positive or negative for each other. The aim of this paper is to propose a conceptual model/framework for investigating the role of political risk and financial market on Sukuk market development in Gulf Cooperation Council (GCC). GCC economies depend heavily on oil revenues which makes them subject to oil prices fluctuations. Therefore, GCC’s governments should diversify their economies by looking for Sukuk as an alternative source of financing, to cover their budget deficit, when the price of oil decreases, and reduce their reliance on oil, because Sukuk has advantages compared to the conventional bond particularly in terms of less information asymmetry. The prior studies have mostly focused on firms' characteristics determinants of Sukuk issuances but gave a little consideration to the role of country' characteristics on Sukuk market development. This paper proposes a framework to explain the political risk and financial markets determinants of Sukuk market development with a focus on the GCC countries that have the largest region in terms of the Islamic financial assets. It is anticipated that the outcome will support policymakers to improve the current state of Sukuk market.

EU Law (MiFID II) and effective regulation: a step towards financial stability?

2019 ◽  
Vol 26 (6) ◽  
pp. 833-848
Author(s):  
Mariia Domina Repiquet
Keyword(s):  
Financial Markets ◽  
Financial Stability ◽  
Financial Regulation ◽  
Duty Of Care ◽  
Eu Law ◽  
Systemic Risks ◽  
Two Sides ◽  
The Eu

This article examines to what extent EU law is effective in preserving global financial stability and, therefore, preventing financial crisis. A difference between macro- and micro-approaches to financial regulation is explained. Whilst the former is concerned with the minimization of systemic risks and maintaining of the financial stability, the latter is focused on the effective regulation of all financial markets’ players, whatever the size of their portfolios. These approaches are the two sides of the same coin, that is limiting the possibility that future financial crises will occur. This paper argues that the effective regulation of investment firms, especially their duty of care, helps to preserve overall financial stability. The choice of the MiFID II as a case study is explained by its appreciation as one of the biggest achievements of EU policymakers in the context of financial law so far. How does a duty to ‘know your customer’ affect global financial stability within the EU? What is the role of soft law in preserving the financial system? These are the questions that this paper seeks to answer.

The EU Experience as a Model for the Development of a Single Financial Market Regulation in the Eurasian Economic Union (EAEU)

2019 ◽  
Vol 16 (5) ◽  
pp. 592-621 ◽  
Author(s):  
Rustam A. Kasyanov
Keyword(s):  
Financial Markets ◽  
Financial Market ◽  
Financial Services ◽  
Market Regulation ◽  
Member States ◽  
Financial Market Regulation ◽  
Eurasian Economic Union ◽  
Economic Union ◽  
The Republic ◽  
The Eu

Five countries became members of the Eurasian Economic Union – an international organization of regional economic integration. The Republic of Kazakhstan, the Russian Federation, and the Republic of Belarus signed the international Treaty in the city of Astana, Kazakhstan on May 29, 2014. The Republic of Armenia and the Kyrgyz Republic acceded to the Treaty later. Harmonized regulation of financial markets should be one of the initial areas of cooperation, with the aims of creating a single financial services market within the EAEU and ensuring non-discriminatory access to the national financial markets of each of the member states. The EAEU member states have already entered into the initial stage of developing the Eurasian common market in financial services. A considerable part of the work should be carried out by a supranational financial market regulation body, which is to be established by 2025 according to the EAEU Treaty. Such financial integration in the EAEU has only been in progress for a limited time period and many of the key steps are yet to be done. The existing national-markets development level is highly non-homogeneous and is in need of further development. In such circumstances, a relevant question related to the study of foreign experience arises. European Union started to form its single financial services market in 1973, and since then it has gained certain experience in financial markets integration. This research paper is dedicated to the issue of necessity and possibility of using the EU experience in the course of the EAEU Single market development. The issue will be addressed in terms of political, legal, academic, and practical aspects. The article is of a general, theoretical legal character, which is why emphasis will be placed on legal and doctrinal questions. Special attention will be paid to an analysis of the Eurasian Economic Union Treaty and its Protocols. The work will be based on the academic research and opinions of Russian and foreign authors.

scholarly journals Sovereign Credit Ratings and Asian Financial Markets

2021 ◽  
Vol 24 (1) ◽  
pp. 165-181
Author(s):  
Khansa Pervaiz ◽  
Zuzana Virglerová ◽  
Muhammad Asif Khan ◽  
Usman Akbar ◽  
József Popp
Keyword(s):  
Financial Markets ◽  
Financial Market ◽  
Credit Rating ◽  
Credit Ratings ◽  
Market Development ◽  
Sovereign Credit ◽  
Sovereign Credit Ratings ◽  
Financial Market Development ◽  
Sovereign Credit Rating

Each region/country seeks to become more efficient to gain the confidence of potential investors. Most of the Asian economies are categorized as emerging markets, where the role of financial markets has even become more intensified to provide financial services to increasing economic and financial activities. Asian financial market has momentously suffered during the Asian, and global financial crisis. The mass destruction was mainly caused due to the mounting uncertainty, which spillover throughout the region, where investors lost their confidence. Considering the pivotal economic role of financial markets, and implications evolve due to sovereign credit rating announcements, this study aims to model the role of sovereign credit rating announcements by Standard and Poor’s, and Moody’s on financial market development of the Asian region. For 24 Asian countries/regions, we perform a regression analysis on sovereign credit rating changes based on financial market development index and its factors. The findings of Driscoll Kraay’s robust estimator reveals that improvement in sovereign credit rating score enhances the financial market development in the region. Moreover, we applied several robustness checks, such as alternative estimators, alternative measures, and three sub-dimensions of financial market development. According to the findings from these robustness checks, the positive impact of sovereign credit ratings on financial market development in the region is robust. Unlike prior literature (which is confined to the event study approach), this study utilizes the historical grades to establish the relationship under the standard error clustering approach. Due to the diversity of investors’ speculations, we propose a micro-level extension of the present model to overcome a difference in country policy.

scholarly journals Financial market infrastructure in Ukraine: consequences of legislative update

2021 ◽  
Vol 2021 (9) ◽  
pp. 70-98
Author(s):  
Natalia SHELUDKO ◽  
◽  
Stanislav SHISHKOV ◽  
Keyword(s):  
Financial Markets ◽  
Financial Market ◽  
Legal Framework ◽  
Practical Implementation ◽  
Legal Basis ◽  
Active Involvement ◽  
Market Participants ◽  
Settlement Services ◽  
Money Transfers ◽  
Market Infrastructure

The defining principle of the effective functioning of the infrastructure of financial markets is a proper legal basis. It is emphasized that the general principles of infrastructure construction in the context of globalization should provide predictability, clarity and familiarity for international investors. This is most important for immature markets, where legal uncertainty, along with other objective difficulties in the functioning of the infrastructure, hinders the development and attraction of investment. The article notes the slow pace of modernization of the financial market infrastructure in Ukraine and the lack of significant progress in the implementation of international recommendations and proposals of foreign experts. In the course of the study of the updated Ukrainian legislation in the field of capital markets, its inconsistency with the legislation on payment systems and money transfers, inconsistency of terminology, lack of legal certainty, attribution of most fundamental issues to the regulator's discretion were substantiated. Legislative “innovations” of Law № 738-IX of 19.06.2020 are extremely destructive, and their practical implementation poses a threat to the integrity and operational landscape of the infrastructure of financial markets in Ukraine. It has been found that since the middle of 2021 a rather dubious form of cash settlements has been implemented, which revives the outdated inconvenient payment scheme and until 2023 preserves the monopolistic nature of clearing and settlement services, exposes stock market participants to legal and operational risks. It is stated that the Law does not follow the principles and recommendations developed in detail by international experts. The existence of preconditions in Ukraine for building a modern infrastructure of financial markets is substantiated, which requires a proper legal basis, which should be created taking into account the interests of market participants, active involvement of experts, quality implementation of European legal framework and international practices.

scholarly journals FINANCIAL CONGLOMERATE IDENTIFICATION BY FINANCIAL MARKETS REGULATORS: CASE OF DEVELOPED AND EMERGING MARKET ECONOMIES

2018 ◽  
Author(s):  
Natalia Kuznetsova ◽  
Zhanna Pisarenko ◽  
Liudmila Lobanova
Keyword(s):  
Financial Markets ◽  
Financial Market ◽  
Emerging Market ◽  
Financial Conglomerates ◽  
Anal Ysis ◽  
Conceptual Apparatus ◽  
Financial Conglomerate ◽  
The World ◽  
Country Analysis ◽  
Cross Country

The paper examines financial conglomerates as an innovative form of integration from different sec-tors of the world financial market. The authors reveal their features, advantages and risks. The goal of the paper is an empirical cross-country analysis of financial conglomerate identification by finan-cial markets regulators. There is no common approach to such a consolidated entity as financial con-glomerate among both researchers and regulators. The blurring of the dividing lines between financial sectors is of great importance too. The development of a conceptual apparatus, the theory and anal-ysis of a financial conglomerate has become of considerable importance.

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