10 Self-Regulation and Private Actors

2018 ◽  
Author(s):  
Spangler Timothy
Keyword(s):  
Best Practices ◽  
Financial Markets ◽  
Financial Regulation ◽  
Self Regulation ◽  
Hedge Fund ◽  
Codes Of Conduct ◽  
Private Investment ◽  
Investment Funds ◽  
Private Actors

This chapter focuses on self-regulation as a means for private actors to address the governance challenge in private investment funds. It first considers the role and limits of financial regulation before discussing the ways that self-regulation and private actors can help in governing the organization, renumerating, risk management and reporting activities of private investment funds. It then examines four codes of conduct for private actors involved in private investment funds: the Best Practices of the President’s Working Group on Financial Markets, the Managed Fund Association’s Sound Practices, Sir Andrew Large’s consultation on ‘Hedge Fund Standards’, and the Institutional Limited Partners Association guidelines. The chapter concludes with an analysis of the role of investors in investor protection failures and the importance of private law for private actors seeking to address the governance challenge.

Transparency Regulation in Financial Markets – Moving into the Surveillance Age?

2011 ◽  
Vol 2 (3) ◽  
pp. 305-321
Author(s):  
Iris H-Y Chiu
Keyword(s):  
Financial Crisis ◽  
Financial Markets ◽  
Financial Regulation ◽  
Global Financial Crisis ◽  
Financial Sector ◽  
Regulatory Control ◽  
Legal Reforms ◽  
The Global Financial Crisis ◽  
Risk Oversight

In the wake of the global financial crisis, the trajectory of legal reforms is likely to turn towards more transparency regulation. This article argues that transparency regulation will take on a new role of surveillance as intelligence and data mining expand in the wholesale financial sector, supporting the creation of designated systemic risk oversight regulators.The role of market discipline, which has been acknowledged to be weak leading up to the financial crisis, is likely to be eclipsed by a more technocratic governance in the financial sector. In this article, however, concerns are raised about the expansion of technocratic surveillance and whether financial sector participants would internalise the discipline of regulatory control. Certain endemic features of the financial sector will pose challenges for financial regulation even in the surveillance age.

7 Governance Issues in Offshore Companies Used as Private Investment Funds

2018 ◽  
Author(s):  
Spangler Timothy
Keyword(s):  
Board Of Directors ◽  
Private Investment ◽  
The United States ◽  
Fiduciary Duty ◽  
Duty Of Care ◽  
Cayman Islands ◽  
Investment Funds ◽  
The Board Of Directors ◽  
The Uk

This chapter examines issues of governance arising from the use of offshore companies as private investment funds. Funds established in offshore jurisdictions are often structured as limited companies that issue shares to investors. Governance issues can arise in offshore companies when voting rights are separated from economic participation. The chapter first considers the role of the board of directors in private investment funds before discussing taxation issues affecting offshore companies used as private investment funds in the UK and in the United States. It then explains the duties of directors under Cayman Islands law, including fiduciary duty, duty of care, diligence, and skill, and duty of confidentiality. It also describes the composition of the board of directors, its meetings, relationship with the fund manager, and responsibility for approval of fund documentation.

scholarly journals Orchestrating Governmental Corporate Social Responsibility Interventions through Financial Markets: The Case of French Socially Responsible Investment

2020 ◽  
Vol 30 (3) ◽  
pp. 288-334 ◽  
Author(s):  
Stéphanie Giamporcaro ◽  
Jean-Pascal Gond ◽  
Niamh O’Sullivan
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Financial Markets ◽  
Socially Responsible Investment ◽  
Socially Responsible ◽  
Role Of Government ◽  
Responsible Investment ◽  
Corporate Social ◽  
Private Actors

ABSTRACTAlthough a growing stream of research investigates the role of government in corporate social responsibility (CSR), little is known about how governmental CSR interventions interact in financial markets. This article addresses this gap through a longitudinal study of the socially responsible investment (SRI) market in France. Building on the “CSR and government” and “regulative capitalism” literatures, we identify three modes of governmental CSR intervention—regulatory steering, delegated rowing, and microsteering—and show how they interact through the two mechanisms of layering (the accumulation of interventions) and catalyzing (the alignment of interventions). Our findings: 1) challenge the notion that, in the neoliberal order, governments are confined to steering market actors—leading and guiding their behavior—while private actors are in charge of rowing—providing products and services; 2) show how governmental CSR interventions interact and are orchestrated; and 3) provide evidence that governments can mobilize financial markets to promote CSR.

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.

8 Investor Protection Concerns in Private Investment Funds

2018 ◽  
Author(s):  
Spangler Timothy
Keyword(s):  
Hedge Funds ◽  
Private Equity ◽  
Business Models ◽  
Conflicts Of Interest ◽  
Investor Protection ◽  
Hedge Fund ◽  
Private Investment ◽  
Investment Funds ◽  
Equity Funds ◽  
Private Equity Funds

This chapter examines the governance challenge in private investment funds arising from investor protection failures. It begins with a discussion of the Madoff affair, which brought to the fore alleged failures in reporting, oversight and governance mechanisms regarding private investment funds, whether hedge funds, private equity funds, real estate opportunities funds or other more esoteric investment pools. It then considers some issues which the Madoff debacle drew attention to, including the presence of multiple fund vehicles in the same structure or in interconnected structures such as parallel funds, master-feeder, and fund of funds. It also analyses the Financial Conduct Authority’s (FCA) concerns about hedge fund fraud and conflicts of interest that may arise in the business models of any of the participants in the private equity market. Finally, it describes ongoing diligence and oversight regarding private investment funds and the Securities and Exchange Commission’s (SEC) concerns over due diligence involving private funds.

scholarly journals Possible ways to attract private investment in a knowledge-based economy

2020 ◽  
Vol 159 ◽  
pp. 06013
Author(s):  
Liudmila Goryainova ◽  
Tatiana Maksimova ◽  
Olga Zhdanova ◽  
Mariia Ermilova
Keyword(s):  
Preschool Education ◽  
Private Investment ◽  
State Universities ◽  
Investment Funds ◽  
Social Partnership ◽  
Knowledge Based ◽  
Triple Helix Model ◽  
Knowledge Based Economy ◽  
The Impact

The article substantiates the role of education, puts forward and confirms the hypothesis of the importance and necessity of social partnership for financing and developing education in a knowledge-based economy. To confirm the hypotheses put forward, the evolution of the concepts of social interaction and social responsibility is studied, the laws of social partnership in a knowledge-based economy are substantiated, which allows using the triple helix model to show the need for interaction between the state, universities and corporations to advance along the path of innovative development. The lack of budget funds for the development of education requires the search for other sources of financing of infrastructure facilities for education. The article discusses the use of concessions as a form of public-private partnership in preschool education, which has recently found application in Russia. Based on the study of international best practices, the authors propose using investment funds, in particular, the mechanism of the impact of investment in education as a promising technology.. One of the solutions to these problems is the mutual investment of funds in intellectual property. The formation of endowment funds for financing education and innovation in the knowledge-based economy is also widespread.

Hedge Fund Regulation

2017 ◽  
Author(s):  
Wulf A. Kaal ◽  
Dale A. Oesterle
Keyword(s):  
United States ◽  
Hedge Funds ◽  
Hedge Fund ◽  
Private Investment ◽  
The United States ◽  
Regulatory Framework ◽  
Securities Regulation ◽  
Investment Fund ◽  
Investment Funds ◽  
Fund Industry

The hedge fund industry in the United States has evolved from a niche market participant in the early 1950s to a major industry operating in international financial markets today. Hedge funds in the United States began as privately held and privately managed investment funds, unregistered and exempt from federal securities regulation. An increasing investor demand for hedge funds and substantial growth of the hedge fund industry resulted in a tectonic shift in the regulatory framework applicable to the industry via the Dodd-Frank Wall Street Reform and Consumer Protection (Dodd-Frank) Act. This chapter summarizes the evolution of the regulatory framework governing the hedge fund industry. It focuses on the registration and disclosure provisions added by the Dodd-Frank Act and several other regulatory innovations, including the Jumpstart Our Business Startups (JOBS) Act and proposals for tax reform of the private investment fund industry.

scholarly journals Understanding Chinese Government Guidance Funds: An Analysis of Chinese Language Sources

2021 ◽  
Author(s):  
Ngor Luong ◽  
Zachary Arnold ◽  
Ben Murphy
Keyword(s):  
Artificial Intelligence ◽  
Industrial Policy ◽  
Chinese Language ◽  
Private Investment ◽  
Chinese Government ◽  
Investment Funds ◽  
Public And Private ◽  
Private Actors ◽  
Policy Mechanisms ◽  
Silver Bullet

China’s government is using public-private investment funds, known as guidance funds, to deploy massive amounts of capital in support of strategic and emerging technologies, including artificial intelligence. Drawing exclusively on Chinese-langauge sources, this report explores how guidance funds raise and deploy capital, manage their investment, and interact with public and private actors. The guidance fund model is no silver bullet, but it has many advantages over traditional industrial policy mechanisms.

14 Evaluating and Implementing Private Monitoring Solutions

2018 ◽  
Author(s):  
Spangler Timothy
Keyword(s):  
Financial Regulation ◽  
Private Investment ◽  
Investment Fund ◽  
Due Diligence ◽  
Investment Funds ◽  
Private Monitoring ◽  
Fund Managers ◽  
Investment Protection ◽  
Adoption And Implementation ◽  
Flow Of Information

This chapter considers three private monitoring solutions designed to help fund investors better address the problems arising from the governance challenge by facilitating a better flow of information from the fund manager to the investors and their agents. All three private monitoring solutions recognise the commercial contexts in which private investment funds operate by emphasizing voluntary steps that fund managers and investors can take incrementally. Each focuses on the provision of accurate and timely information as the means to overcome the investment protection concerns that arise due to the collectivised nature of the private investment fund. The chapter first looks at the criticisms against private monitoring solutions as well as the limits of financial regulation before discussing due diligence as the commercial foundation for private monitoring solutions. It also examines how to best support the wider adoption and implementation of private monitoring solutions.

Incentives for complexity in financial regulation

2014 ◽  
Vol 15 (2) ◽  
pp. 102-109
Author(s):  
Tom Berglund
Keyword(s):  
Financial Markets ◽  
Design Methodology ◽  
Financial Regulation ◽  
Content Type ◽  
Resource Requirements ◽  
High Integrity ◽  
Explicit Discussion ◽  
Practical Implications ◽  
Taking Care

Purpose – The purpose of the paper is to find out which incentives are present for persons who are taking care of financial regulation in practice, and how these incentives impact their attitudes towards complexity of financial regulation. Design/methodology/approach – Based on recent contributions, reasons behind the increase in complexity observed in financial regulation are discussed. The role of actual incentives for the persons involved in setting up and enforcing regulation is detailed. Findings – Incentives for persons that impact drafting and implementation of financial regulation produce a bias towards excessive complexity. Additional complexity reduces the risk for being exposed to aggressive journalism and pressure from populist politicians. Increasing complexity of regulation will also benefit large players since the costs are largely fixed. Research limitations/implications – Careful studies measuring the costs of increased complexity in terms of increased resource requirements are needed. Practical implications – To reduce the bias towards excess complexity, a body consisting of knowledgeable persons with high integrity is required with an explicit mandate of scrutinising regulation in order to reduce, or at least not increase, complexity. This body must be empowered with sufficient discretion to tackle cases that lack precedents. Originality/value – The paper introduces an explicit discussion of existing incentives on the regulator side of financial markets to increase the understanding of the issues involved in the increased complexity that we observe in the rules that are implemented to guide behaviour in financial markets.

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