Financial Markets and Exchanges Law

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

Part V New Financial Technology in Financial Markets and Infrastructure, 15 Impact on Regulation of Financial Markets

This chapter considers the impact of fintech and regtech from a macro perspective. It demonstrates the depth of the changes and importance to consider in all the elements that are converging to create a new reality and a new economy. It also adopts the meaning of the term “fintech” as published by the Bank of International Settlements and the Financial Stability Board, which means “technology—enabled innovation in financial services”. This chapter describes the impact of fintech on financial services regulation. It provides a macro analysis on fintech solutions that are tested or implemented in financial services as they are directly applicable to stock markets and exchanges.

Identification Infrastructures and the Capitalization of Data in the Development of Data-Driven Regulation

This chapter discusses the establishment of a global identification infrastructure to improve the regulation of financial markets. The Global Legal Entity Identifier System (GLEIS), was developed to enable financial regulators to trace the owners of financial assets and liabilities, which was revealed as a problem by the global financial crisis of 2008. This chapter focuses on one of the key controversies that arose as part of the development of GLEIS—the issue of data quality. The chapter uses the GLEIS case to explain how differing views among infrastructure participants about the development of a complex data-driven regulatory system are reconciled. It shows that establishing such a system involves the turning of publicly available data into valuable assets in a process the chapter calls ‘capitalization through certification’ and argue that this process is relevant to broader debates about the use of business intelligence and analytics tools and techniques for regulatory purposes.

Die postkeynesianische Ökonomik in der Finanzethik des katholischen Sozialethikers Bernhard Emunds – Diskussion aus einer angebotsorientierten Perspektive

Bernhard Emunds, a German Catholic social ethicist, is engaged in research into financial markets. This article introduces post-Keynesianism as his economic foundation, followed by a description of conclusions Emunds draws about the regulation of financial markets. Thereafter, implications of the post-Keynesian framework are contrasted with those of supply-side economics. The article finally appraises the suitability of post-Keynesianism as an economic foundation for Catholic social teaching.

Megaregulation of financial market: Russian and international practice

The article examines domestic and foreign practices of mega–regulation of the financial market. The analysis of the theoretical apparatus of regulation of financial markets is carried out, the global tendencies of regulation are systematized and the ways of improving the regulation of the financial market of Russia are determined based on the analysis of the current state of its development.

Risk, uncertainty and the market: a rethinking of Islamic and Western finance

This paper aims at providing an account of the Islamic conception of Gharar in contrast to the current Western conceptualisation of risk, using the respective financial legal frameworks of both as the criterion. One of the more decisive stakes of the difference in approach between the Islamic and contemporary Western legal orders today concern the regulation of financial markets; specifically, the definitions of risk and uncertainty – crucial characteristics of modern economies – can be understood as preferentially related to specific features of Islamic law. In the end, according to Knight, money-creation processes are centred on uncertainty. Without uncertainty, there is no profit. This is why, although different at first sight, Islamic finance with its understanding of permissible Gharar and Western finance with its uncertainty-aversion trend have become more resilient, especially since the financial crisis (2007–2010).