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found that since the middle of 2021 a rather dubious form of cash settlements has been implemented, which revives the outdated inconvenient payment scheme and until 2023 preserves the monopolistic nature of clearing and settlement services, exposes stock market participants to legal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 A Theoretical Conceptualization of Institutional Provision of the Financial Market

2020 ◽  
Vol 9 (512) ◽  
pp. 219-228
Author(s):  
S. V. Onyshko ◽  
◽  
D. O. Savenko ◽  
Keyword(s):  
Financial Markets ◽  
Financial Market ◽  
Legal Framework ◽  
Financial Resources ◽  
Market Development ◽  
Market Participants ◽  
Financial Market Development ◽  
Relationship Of ◽  
The Relationship ◽  
Theoretical Conceptualization

The article is concerned with the problems of formation and development of institutional provision of the financial market. The relevance of the problem is caused by the relationship of formal and informal norms of economic processes and phenomena, the understanding of which provides the key to achieving the effectiveness of the financial market development. Understanding the essence of institutional provision of the financial market and the factors of its formation and development makes it possible to make more informed and effective decisions in the sphere of financial market development. The article is aimed at substantiating the conceptual approaches to the structuring of institutional provision of the financial market. It is substantiated that institutional provision of the financial market includes both formal and informal institutions. The formal institutions, in turn, consist of institutions-organizations and institutions-norms. The factors of occurrence of institutional deformations in the financial market are systematized. The institutions of the financial market are structured, in particular, in the composition of the institutions-norms the authors allocate the formal (international legal framework for concluding and implementing agreements in financial markets, national regulatory framework for concluding and implementing agreements in financial markets, norms of related national and international law, ensuring the conclusion and implementation of agreements in financial markets) and the informal norms (norms stipulated by religion, informal agreements and conspiracies between the financial market participants, unofficial (shadow) markets for the conclusion and implementation of financial agreements). In the composition of institutions-organizations the authors allocate the institutions-buyers of financial resources; institutions – sellers of financial resources; institutions that serve the functioning of institutions-sellers and institutions – buyers of financial resources; institutions-regulators. The institutional provision of the financial market is structured and the relationship between institutions-norms, institutions-rules and the State is defined. The principles of institutional provision of the financial market are substantiated and its functions are defined.

The Capital Market Authority Effectiveness in the Regulation of Financial Markets perspectives from the financial sector actors

2012 ◽  
Vol 02 (11) ◽  
pp. 15-24
Author(s):  
Charles Kombo Okioga
Keyword(s):  
Financial Markets ◽  
Financial Market ◽  
Capital Markets ◽  
Capital Market ◽  
Financial Regulation ◽  
International Standards ◽  
Market Regulation ◽  
Financial Market Regulation ◽  
Market Participants ◽  
New Business

Capital Market Authority in Kenya is in a development phase in order to be effective in the regulation of the financial markets. The market participants and the regulators are increasingly adopting international standards in order to make the capital markets in sync with those of developed markets. New products are being introduced and new business lines are being established. The Capital Markets Authority (Regulator) is constantly reviewing existing regulations and recommending changes to regulate the market properly. Business lines and activities are being harmonized by market participants to provide a one stop solution in order to meet the financial and securities services needs of the investors. The convergence of business lines and activities of market intermediaries gives rise to the diversity of a firm’s business operations to meet multiplicity of regulations that its activities are subject to. The methodology used in this study was designed to examine the relationship between capital markets Authority effective regulation and the performance of the financial markets. The study used correlation design, the study population consisted of 30 employees in financial institutions regulated by Capital Markets Authority and 80 investors. The study found out that effective financial market regulation has a significant relationship with the financial market performance indicated by (r=0.571, p<0.01) and (r=0.716, p≤0.01, the study recommended a further research on the factors that hinder effective financial regulation by the Capital Markets Authority.

scholarly journals Economic-mathematical model for predicting financial market dynamics

2018 ◽  
Vol 15 (4) ◽  
pp. 61-69
Author(s):  
Artur R. Musin
Keyword(s):  
Neural Network ◽  
Mathematical Model ◽  
Kalman Filter ◽  
Financial Markets ◽  
Financial Market ◽  
Future Price ◽  
Market Participants ◽  
Pricing Process ◽  
Professional Market ◽  
Correct Forecast

Study purpose.Existing approaches to forecasting dynamics of financial markets, as a rule, reduce to econometric calculations or technical analysis techniques, which in turn is a consequence of preferences among specialists, engaged in theoretical research and professional market participants, respectively. The main study purpose is developing a predictive economic-mathematical model that allows combining both approaches. In other words, this model should be estimated using traditional methods of econometrics and, at the same time, take into account the impact on the pricing process of the effect of clustering participants on behavioral patterns, as the basis of technical analysis. In addition, it is necessary that the created economic-mathematical model should take into account the phenomenon of existing historical trading levels and control the influence they exert on price dynamics, when it falls into local areas of these levels. Such analysis of price behavior patterns in certain areas of historical repeating levels is a popular approach among professional market participants. Besides, an important criterion of developing model’s potential applicability by a wide range of the interested specialists is its general functional form’s simplicity and, in particular, its components.Materials and methods. In the study, the market of the pound sterling exchange rate against the US dollar (GBP/USD) for the whole period of 2017 was chosen as the considered financial series, in order to forecast it. The presented economic-mathematical model was estimated by classical Kalman filter with an embedded neural network. The choice of these assessment tools can be explained by their wide capabilities in dealing with non-stationary, noisy financial market time series. In addition, applying Kalman filter is a popular technique for estimation local-level models, which principle was implemented in the newly model, proposed in article.Results. Using chosen approach of simultaneous applying Kalman filter and artificial neural network, there were obtained statistically significant estimations of all model’s coefficients. The subsequent model application on GBP/USD series from the test dataset allowed demonstrating its high predictive ability comparing with added random walk model, in particular judging by percentage of correct forecast directions. All received results have confirmed that constructed model allows effectively taking into account structural features of considered market and building good forecasts of future price dynamics.Conclusion. The study was focused on developing and improving apparatus of forecasting financial market prices dynamics. In turn, economic-mathematical model presented in that paper can be used both by specialists, carrying out theoretical studies of pricing process in financial markets, and by professional market participants, forecasting the direction of future price movements. High percentage of correct forecast directions makes it possible to use proposed model independently or as a confirmatory tool.

scholarly journals What is Bringing the Revised European Statistics Code of Practice to Statistical Experience?

2019 ◽  
Vol 26 (3) ◽  
pp. 45-50
Author(s):  
A. A. Sultanova
Keyword(s):  
Legal Framework ◽  
Practical Implementation ◽  
Statistical System ◽  
Legal Basis ◽  
Code Of Practice ◽  
Legal Frameworks ◽  
Former Ussr ◽  
European Statistics ◽  
Quality Policy ◽  
Made In

This article considers the main changes in the European Statistics Code of Practice (Code of Practice) made in 2017; it addresses noticeable processes of transformation of legal frameworks and practices in some countries of the former USSR. There is also a brief analysis of the new opportunities that bring the introduction of this standard.The paper presents most relevant revisions and additions to the Code of Practice, made in 2017 by the European Statistical System Committee, the main differences of the new version of the Quality Declaration of the European Statistical System. The paper addresses the feasibility of practical implementation of some standards of the revised document as well as information about the processes of transformation of the legal basis and practices in some countries of the former USSR.The author concludes that the Code of Practice may serve as a basis for national statistical services to establish quality policy while aligning this international standard with national conditions can be beneficial for the development of legal framework for the official statistics.

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.

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.

Chaos and nonlinear forecastability in economics and finance

1994 ◽  
Vol 348 (1688) ◽  
pp. 397-404 ◽  
Keyword(s):  
Time Series ◽  
Financial Markets ◽  
Empirical Evidence ◽  
Financial Market ◽  
Chaotic Dynamics ◽  
Economic Research ◽  
Nonlinear Modelling ◽  
Market Participants ◽  
The Impact ◽  
Market Perspective

Both academic and applied researchers studying financial markets and other economic series have become interested in the topic of chaotic dynamics. The possibility of chaos in financial markets opens important questions for both economic theorists as well as financial market participants. This paper will clarify the empirical evidence for chaos in financial markets and macroeconomic series emphasizing what exactly is known about these time series in terms of forecastability and chaos. We also compare these two concepts from a financial market perspective contrasting the objectives of the practitioner with those of the economic researchers. Finally, we will speculate on the impact of chaos and nonlinear modelling on future economic research.

A Taxonomy of Financial Market Manipulations: Establishing Trust and Market Integrity in the Financialized Economy through Automated Fraud Detection

2017 ◽  
Vol 32 (3) ◽  
pp. 251-269 ◽  
Author(s):  
Michael Siering ◽  
Benjamin Clapham ◽  
Oliver Engel ◽  
Peter Gomber
Keyword(s):  
Financial Markets ◽  
Financial Market ◽  
High Frequency ◽  
Fraud Detection ◽  
Vast Number ◽  
Market Surveillance ◽  
Market Abuse ◽  
Market Participants ◽  
Speculative Trading

Financial market manipulations represent a major threat to trust and market integrity in capital markets. Manipulations contribute to mispricing, market imperfections and an increase in transaction costs for market participants and in costs of capital for issuers. Manipulations are facilitated by increased transaction velocity, speculative trading and abusive usage of new trading technologies, i.e., they are directly linked to financial sector changes that drive financialization. Research at the intersection of financialization and IS might support regulatory authorities and market operators in improving market surveillance and helping to detect fraudulent activities. However, confusing terminology is prevalent on financial markets with respect to different manipulation techniques and their characteristics, which hampers efficient fraud detection. Furthermore, recognizing manipulations is challenging given the large number of information sources and the vast number of trades occurring not least because of high-frequency traders. Therefore, automated market surveillance tools require a comprehensive taxonomy of financial market manipulations as a basis for appropriate configuration. Based on a cluster analysis of SEC litigation releases, a review of the latest market abuse regulation and academic studies, we develop a taxonomy of manipulations that structures and details existing manipulation techniques and reveals how these techniques differ along several dimensions. In a case study, we show how the taxonomy can be utilized to guide the development of appropriate decision support systems for fraud detection.

Room to Move: International Financial Markets and National Welfare States

2000 ◽  
Vol 54 (4) ◽  
pp. 737-773 ◽  
Author(s):  
Layna Mosley
Keyword(s):  
Financial Markets ◽  
Interest Rates ◽  
Financial Market ◽  
Government Policy ◽  
International Political Economy ◽  
Research Question ◽  
Policy Outcomes ◽  
International Financial Markets ◽  
Central Research ◽  
Market Participants

A central research question in international political economy concerns the influence of financial markets on government policy outcomes. To what extent does international capital mobility limit government policy choices? I evaluate the relationship between international financial markets and government policy outcomes, with a focus on the government bond market in developed democracies. Evidence includes interviews with financial market participants and a cross-sectional time-series analysis of the determinants of interest rates. This evaluation suggests that governments of developed democracies face strong but narrowly defined financial market pressures. Financial market participants are concerned with a few macroeconomic policy indicators, including inflation rates and government deficit/GDP ratios, but not with micropolicy indicators, such as the distribution of government spending across functional categories. In these areas, governments retain policymaking autonomy. I conclude by exploring the role of financial market influences within domestic politics and offering suggestions for further research.

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