Investor Protection in the Capital Markets Union

2018 ◽  
Author(s):  
Veerle Colaert
Keyword(s):  
Capital Markets ◽  
Financial Regulation ◽  
General Trend ◽  
Investor Protection ◽  
Information Service ◽  
Building Blocks ◽  
Playing Field ◽  
Product Regulation ◽  
Capital Markets Union ◽  
Protection Legislation

Recent years have witnessed a tidal wave of new EU financial regulation in general and investor protection legislation in particular. The Capital Markets Union project has added a number of further initiatives. This chapter attempts to bring some order in the multitude of rules, by sorting them into three main building blocks: information, service quality requirements (conduct of business rules), and product regulation. A general trend among the three building blocks is a more cross-sectoral approach to investor protection, levelling the playing field between banking, investment, insurance, and personal pension products and services. This trend towards a more horizontal approach, although not perfect, is laudable. A challenge for EU financial regulation is to decide how far this trend should go.

Part II The New EU Prospectus Rules, 9 The Contents of the Prospectus: Non-Financial Information and Materiality

2020 ◽  
Author(s):  
de Serière Victor
Keyword(s):  
Capital Markets ◽  
Investor Protection ◽  
Tort Law ◽  
Financial Information ◽  
Good News ◽  
Level Playing Field ◽  
Playing Field ◽  
Prospectus Liability ◽  
Capital Markets Union ◽  
The Eu

This chapter addresses the non-financial information to be included in a prospectus, alongside an analysis of the fundamental concept of materiality. It examines some issues relating to non-financial information to be included in a prospectus under the new EU prospectus regime. A level playing field in terms of uniform investor protection within the EU accordingly has regrettably not been achieved. This chapter argues that the Prospectus Regulation could have achieved more by requiring Member States to impose certain uniform tort law requirements in their national prospectus liability regimes. Another topic addressed in this chapter relates to the possibility for offerors of securities to obtain liability protection by including exoneration clauses in prospectuses. The Prospectus Regulation does not regulate this topic, but the analysis in this chapter shows that the possibilities appear to be severely limited; practice in any event shows that exoneration is seldom (if ever) stipulated. The chapter concludes that all this appears to be relatively good news in terms of investor protection generally, but the lack of harmonisation stands in the way of a unified EU capital markets union.

scholarly journals An Analysis of the Prospectus Regime: The EU Reforms and the ‘Brexit’ Factor

2018 ◽  
Vol 15 (1) ◽  
pp. 69-100
Author(s):  
Elizabeth Howell
Keyword(s):  
Capital Markets ◽  
Financial Regulation ◽  
Market Access ◽  
Dominant Role ◽  
Investor Protection ◽  
Protection Device ◽  
New Challenges ◽  
The Uk ◽  
The Eu

‘Brexit’ creates significant new challenges; it risks placing the UK’s position as a leading capital markets centre in jeopardy, and it places existing, long-established market access arrangements in doubt. Yet, it also creates opportunities. In particular, the UK could have the ability going forward, should it so wish, to extricate itself from the EU’s prospectus regime. Indeed, the UK is especially well-equipped in this regard, given the dominant role it plays in global and EU capital markets, and given that, historically, the UK has been closely involved with, and a key influence in the design of EU regulations, both with respect to capital markets, and more generally in relation to financial regulation. Accordingly, via an analysis of the existing prospectus framework, and the recently revamped EU rules, this paper contributes to the existing scholarship on prospectuses and considerswhat could, or should, happen to the UK’s prospectus regime following Brexit. It examines three possibilities and it advocates an ‘equivalence-plus’ approach. Specifically, it speculates that this option is most likely to guarantee the prospectus serves as a valuable investor protection device, as well as providing an attractive fundraising vehicle for firms.

Private Placements in the Capital Markets Union

2018 ◽  
Author(s):  
Frank GB Graaf
Keyword(s):  
Capital Markets ◽  
Alternative Source ◽  
Private Placement ◽  
Private Placements ◽  
Capital Markets Union

This chapter looks at recent initiatives in the context of the European Commission's flagship plans for a Capital Markets Union (CMU) designed to encourage a pan-European private placement market. In reality, private placements are mainly available as a funding tool for medium-sized and larger companies. Nonetheless, private placements are regarded by CMU's policymakers as an alternative source of long-term funding, which is simple enough for smaller corporates and small and medium-sized enterprises (SME), and with benefits that they might find attractive. The Commission's initial intention in the design of a CMU was to enable a greater use by SMEs of private placements.

Initial Public Offerings in the CMU

2018 ◽  
Author(s):  
Merritt B Fox
Keyword(s):  
Information Asymmetry ◽  
Initial Public Offerings ◽  
Capital Markets ◽  
Final Section ◽  
Public Offerings ◽  
Rating Agencies ◽  
Capital Markets Union ◽  
Preceding Discussion ◽  
Directors And Officers

This chapter begins by considering the especially severe information-asymmetry problem that plagues primary offerings of truly new securities. It then examines market-based solutions for these problems, the shortcomings of exclusive reliance on such solutions, and the rationale for having a government-designed affirmative-disclosure regime, whereby an issuer making an offering is required to answer certain questions. It also addresses the question of whether this regime should be imposed on all issuers making such offerings or only those that volunteer to be subjected to it. The remainder of the chapter considers the rationale for mandating the imposition of liability on issuers, issuer directors and officers, underwriters, dealers, and experts such as accountants or rating agencies when there have been material misstatements or material omissions of what was required to be disclosed. The final section briefly applies the preceding discussion to the efforts, as part of the Capital Markets Union, to increase the opportunities for European SMEs raise funds through public offerings.

The Role of Financial Innovation in EU Market Integration and the Capital Markets Union

2018 ◽  
Author(s):  
Emilios Avgouleas
Keyword(s):  
Capital Markets ◽  
Risk Sharing ◽  
Market Integration ◽  
Financial Innovation ◽  
The European Union ◽  
Recent Developments ◽  
Capital Markets Union ◽  
Critical Overview ◽  
The Eu

This chapter offers a critical overview of the issues that the European Union 27 (EU-27) will face in the context of making proper use of financial innovation to further market integration and risk sharing in the internal financial market, both key objectives of the drive to build a Capital Markets Union. Among these is the paradigm shift signalled by a technological revolution in the realm of finance and payments, which combines advanced data analytics and cloud computing (so-called FinTech). The chapter begins with a critical analysis of financial innovation and FinTech. It then traces the EU market integration efforts and explains the restrictive path of recent developments. It considers FinTech's potential to aid EU market integration and debates the merits of regulation dealing with financial innovation in the context of building a capital markets union in EU-27.

Capital Markets Union after Brexit

2018 ◽  
Author(s):  
Danny Busch ◽  
Emilios Avgouleas ◽  
Guido Ferrarini
Keyword(s):  
Capital Markets ◽  
Action Plan ◽  
Economic Perspective ◽  
Institutional Investment ◽  
Fully Integrated ◽  
Cross Border ◽  
Better Regulation ◽  
Capital Markets Union ◽  
To Come ◽  
General Aspects

In line with the European Commission's wish to create fully integrated European capital markets, its Capital Markets Union (CMU) Action Plan is intended to make it easier for providers and receivers of funds to come into contact with one another within Europe, especially across borders. This book discusses various aspects of CMU from a legal and/or economic perspective. The chapters are grouped in a thematic way, covering the following areas: (i) general aspects, (ii) Brexit, (iii) financing innovation, (iv) raising capital on the capital markets, (v) fostering retail and institutional investment, (vi) leveraging banking capacity to support the wider economy, and (vii) facilitating cross-border investing. This chapter outlines some general aspects of CMU that are not explicitly covered by the other chapters in this book: (1) the CMU objectives, (2) the EBU–CMU relationship, (3) regulatory burden, and (4) Better Regulation and the Call for Evidence.

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