Running the World's Markets

2011 ◽  
Author(s):  
Ruben Lee
Keyword(s):  
Financial Markets ◽  
Business Economics ◽  
Global Consensus ◽  
Governance Model ◽  
Finance Law ◽  
Key Aspects ◽  
Regulatory Powers ◽  
Market Infrastructure ◽  
Theoretical Issues ◽  
Central Securities Depositories

The efficiency, safety, and soundness of financial markets depend on the operation of core infrastructure—exchanges, central counter-parties, and central securities depositories. How these institutions are governed critically affects their performance. Yet, despite their importance, there is little certainty, still less a global consensus, about their governance. This book examines how markets are, and should be, run. Utilizing a wide variety of arguments and examples from throughout the world, the book identifies and evaluates the similarities and differences between exchanges, central counter-parties, and central securities depositories. Drawing on knowledge and experience from various disciplines, including business, economics, finance, law, politics, and regulation, the book employs a range of methodologies to tackle different goals. Conceptual analysis is used to examine theoretical issues, survey evidence to describe key aspects of how market infrastructure institutions are governed and regulated globally, and case studies to detail the particular situations and decisions at specific institutions. The combination of these approaches provides a unique and rich foundation for evaluating the complex issues raised. The book analyzes efficient forms of governance, how regulatory powers should be allocated, and whether regulatory intervention in governance is desirable. It presents guidelines for identifying the optimal governance model for any market infrastructure institution within the context of its specific environment. The book provides a definitive and peerless reference for how to govern and regulate financial markets.

Financial Markets and Exchanges Law

2021 ◽  
Keyword(s):  
Financial Markets ◽  
New Technology ◽  
Payment Systems ◽  
Regulation Of Financial Markets ◽  
Market Location ◽  
Clearing And Settlement ◽  
The Uk ◽  
Securities Trading ◽  
Market Infrastructure ◽  
Financial Technology

The book provides a comprehensive and authoritative analysis on the regulation of financial markets and market infrastructure. It focuses on stock markets and exchanges, associated trading, clearing, and settlement, and on payment systems, set in their historical and current contexts. This new edition addresses a number of major developments that have impacted the UK, wider European and international financial markets, such as within the UK, the PRA, the FCA and the Bank of England have become established financial regulators, each with its distinguishing responsibilities; MiFID has been substantially revised and strengthened through new directly applicable EU regulation; MiFID 2 also addresses the challenges posed by the use of fast-technology such as high frequency and algorithmic trading; and new technology is beginning to make an impact on the infrastructure of financial markets. This new edition includes updated content on the growing importance of financial technology with two new chapters on the emerging impact of financial technology on markets and on the regulation of markets. There is also a new chapter on MiFID 2 and MiFIR – the new securities trading architecture that will see the introduction of a new trading venue as well as significant changes to and the pre- and post-trade transparency and reporting regime. The introduction of mandatory trading of derivatives on trading venues is addressed together with the related post-EMIR regime for the mandatory clearing of certain classes of derivatives. Chapters on the role of the European Commission and ESMA have been updated, and consideration is given to the possible implications of Brexit for market location and access

Regulation and Governance of Market Infrastructure: Global Perspective

2011 ◽  
Author(s):  
Ruben Lee
Keyword(s):  
International Monetary Fund ◽  
Global Perspective ◽  
Regulatory Regime ◽  
Securities Markets ◽  
The World Bank ◽  
The World ◽  
Central Counterparties ◽  
Market Infrastructure ◽  
The International Monetary Fund ◽  
Central Securities Depositories

This chapter examines a unique set of assessments of securities markets and their regulation, from countries around the world, in order to provide a global perspective on policymakers' viewpoints about the regulation and governance of market infrastructure institutions. The assessments were undertaken as part of an initiative called the Financial Sector Assessment Program (FSAP), implemented jointly by the International Monetary Fund and the World Bank. Each assessment evaluates the extent to which a country's securities markets regulatory regime reflects internationally recognized standards. The assessments prepared for the FSAP since its inception in 1999 up until 2006 are analyzed. Together they provide insights on three topics: how exchanges, central counterparties, and central securities depositories are regulated and governed globally; official perceptions on the optimal way of regulating markets and market infrastructure institutions; and the assumptions that are often made when examining the governance and regulation of market infrastructure institutions.

Legal Systems & Skills

2017 ◽  
Author(s):  
Scott Slorach ◽  
Judith Embley ◽  
Peter Goodchild ◽  
Catherine Shephard
Keyword(s):  
Research Problem ◽  
Law Firms ◽  
Legal Services ◽  
Legal Service ◽  
Legal Systems ◽  
Business Economics ◽  
Legal Studies ◽  
Finance Law ◽  
Core Areas ◽  
Essential Knowledge

Legal Systems & Skills provides essential knowledge and skills for underpinning legal studies, providing a foundation for graduate employability both within and outside the legal service profession. It develops students’ understanding in three core areas: legal systems, legal skills, and professional development and commercial awareness. The first part of the book looks at legal systems, sources of law, legislation, case law, and legal services. The next part considers how to read and understand law, legal research, problem solving, communication, and writing and drafting. The final part examines employability skills, business, economics and finance, law firms, and clients.

Creativity, simulation, and conceptualization

1999 ◽  
Vol 22 (4) ◽  
pp. 615-615 ◽  
Author(s):  
Gilles Fauconnier
Keyword(s):  
Cognitive Science ◽  
Meaning Construction ◽  
Valuable Contribution ◽  
A Priority ◽  
Key Aspects ◽  
Theoretical Issues

Understanding the role of simulation in conceptualization has become a priority for cognitive science. Barsalou makes a valuable contribution in that direction. The present commentary points to theoretical issues that need to be refined and elaborated in order to account for key aspects of meaning construction, such as negation, counterfactuals, quantification or analogy. Backstage cognition, with its elaborate bindings, blendings, and mappings, is more complex than Barsalou's discussion might suggest. Language does not directly carry meaning, but rather serves, along with countless other situational elements, as a powerful instrument for prompting its construction

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.

Financial Market Infrastructures

2016 ◽  
pp. 1-19
Author(s):  
Martin Diehl
Keyword(s):  
Financial Markets ◽  
Financial Market ◽  
Financial System ◽  
Relevant Information ◽  
Payment Systems ◽  
Worst Case ◽  
Analytical Importance ◽  
The Stability ◽  
Definition Of ◽  
Market Infrastructure

Like a human being's backbone, well-functioning financial market infrastructures contribute to the stability of the financial system. They enable fast and smooth movements, channel relevant information, protect the channels for transmission and reduce risk. Problems in financial market infrastructures may lead to dysfunctions of financial markets, a lack of options for transaction and, therefore, to limited movability, misleading information or disturbed information channels and in the worst case to systemic risk. The chapter explains the role of financial market infrastructure within the wider definition of a financial system. Based on the historical emergence of payment systems, central clearing and central securities depositories, the special advantage of financial market infrastructures for the productivity of intermediaries, for the efficiency of financial markets and for the welfare of an economy is explained. The chapter shows the economic and analytical importance and specificity of financial market infrastructures.

Who Should Regulate What?

2011 ◽  
Author(s):  
Ruben Lee
Keyword(s):  
Regulatory Authority ◽  
Securities Markets ◽  
Central Counterparties ◽  
Different Types ◽  
Regulatory Institutions ◽  
Regulatory Powers ◽  
Central Securities Depositories ◽  
Do So

The question of what regulatory authority over securities markets should be assigned to exchanges, central counterparties, and central securities depositories has long been controversial. This chapter explores this issue in the broader context of examining how regulatory powers should be allocated between government regulators, self-regulatory organizations, and other types of regulatory institutions. The chapter is composed of three sections. In the first, the complexity of the decision as to how to allocate regulatory powers in a jurisdiction is discussed. The second section lists and analyzes crucial factors and constraints that affect the relative merits of allocating regulatory powers to different types of institutions. The last section encapsulates these discussions and presents in a simple and accessible manner key lessons about how best to allocate regulatory powers in the securities markets. In order to do so, nine general propositions are articulated.

Definitions

2011 ◽  
Author(s):  
Ruben Lee
Keyword(s):  
Financial Markets ◽  
Central Counterparties ◽  
Derivative Markets ◽  
Central Securities Depositories

For many people, the “infrastructure institutions” in financial markets are the exchanges, central counterparties (CCPs), and central securities depositories (CSDs) that provide the trading, clearing, settlement, and sometimes other core functions for cash and derivative markets. There are, however, also many reasons why the definitions of an infrastructure, an exchange, a CCP, and CSD are all quite opaque. This is important, as the identification of a particular organization as one of these types of institutions can have significant commercial, regulatory, and policy consequences. This chapter aims to provide some basic insights into the definitions and nature of an infrastructure, an exchange, a CCP, and a CSD; and explores the reasons why these concepts are sometimes ambiguous and controversial. The first section considers the meaning and nature of what is an infrastructure. The second provides some comments on the definitions and nature of exchanges, CCPs, and CSDs, and on the functions they deliver. Brief conclusions are offered in the last section.

The Collateral-Linked Currency Forward (CLCF) Contract: Blockchain-Enabled OTC Currency Forward Market Infrastructure

2018 ◽  
Keyword(s):  
Financial Markets ◽  
Price Volatility ◽  
Primary Source ◽  
Counterparty Risk ◽  
Forward Contracts ◽  
Over The Counter ◽  
Market Participants ◽  
Distributed Ledger ◽  
Forward Contract ◽  
Market Infrastructure

We eliminate the primary source of uncompensated risk from trading in one of the largest sectors of the global financial markets. Market infrastructure enhancements are achieved in the foreign exchange (FX) forward contract market by integrating distributed ledger technology (DLT) into the creation of collateral-linked contracts for currency forwards (CLCF). Specifically, we deploy DLT with embedded automation as the shared platform for bilateral FX forward contracts, including operational provisions of International Swaps and Derivatives Association and Credit Support Annex agreements. Through automation, we link the economics of the currency forward contract and the price-volatility-induced counterparty exposures, bringing intraday counterparty risk to within mutually acceptable ranges. The essential benefits of the over-the-counter market structure are preserved because CLCF contracts remain bilateral to allow for customized terms and conditions between market participants. Reduced concentration risk is also preserved because there is no central counterparty or central clearing organization into which all risks are pooled. As a result, liquidity is enhanced and risk is reduced in the FX forward contract market.

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.

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