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  • M Bianchi, L Enriques and M Milic, 'Enforcing Rules on Related Party Transactions in Italy: One Securities Regulators’ Challenge' in L Enriques and T Tröger (eds), The Law and Finance of Related Party Transactions (Cambridge University Press 2019)
    DOI: https://doi.org/10.1017/9781108554442
    This paper is the introductory chapter of Luca Enriques and Tobias Tröger (eds.), The Law and Finance of Related Party Transactions (Cambridge University Press: forthcoming). Its goal is to sketch out the individual chapters’ contributions to the scholarly and policy debates on the adequate regulation of related party transactions (RPTs). For that purpose, we scope the issue by highlighting the principal costs and benefits of shareholder control, which allows both the implementation of entrepreneurial vision and various forms of rent-seeking. We next proceed by putting the challenges of regulating RPTs into the broader context of conflicts of interest and tunneling techniques. Against this background, we then turn to the main regulatory options available for legislators (independent/disinterested director approval, majority of the minority approval, ex post fairness review, and involvement of supervisory agencies), highlighting some of the key insights on each of them from individual chapters. Finally, we show how the chapters in the book can also inform European legislators who are currently in the process of implementing the revised Shareholder Rights Directive rules on RPTs.
  • P P Craig, 'Engagement and Disengagement with International Institutions: The UK Perspective' in C Bradley (ed), The Oxford Handbook of Comparative Foreign Relations Law (Oxford University Press 2019)
  • E Fisher, Bettina Lange and Eloise Scotford, Environmental Law: Text, Cases and Materials (2nd Ed OUP 2019)
    ISBN: 9780198811077
  • J Armour and L Enriques, 'Equity Crowd Funding: An Acid Test for Securities Regulation' in Franklin Allen, Ester Faia, Michael Haliassos and Katja Langenbucher (eds), Capital Market Union and Beyond (MIT Press 2019)
    ISBN: 9780262042765
  • JA Armour and L Enriques, 'Equity Crowdfunding: An Acid Test for Securities Regulation?' in F Allen, E Faia, M Haliassos and K Langenbucher (eds), Capital Markets Union and Beyond (MIT Press 2019)
  • P Davies, 'Financial Stability and the Global Reach of EU Law' in Marise Cremona Joanne Scott (ed), EU Law Beyond EU Borders (OUP 2019)
    This chapter considers the influence of European Union law in the post-crisis regulation of financial institutions. The global nature of the financial crisis of 2007-2009 created incentives for jurisdictions to “export” their legislative solutions globally, in order to promote domestic stability. The chapter begins by using an analysis of the development of the crisis from a domestic US sub-prime lending problem into a global lack of trust in financial institutions, with a consequent credit crunch and state bail-outs of the biggest failing institutions, to illustrate these incentives. However, a crude strategy of export is likely to produce adverse reactions from other jurisdictions. The potential for friction was reduced by two developments. First, a rapid expansion of international standards of financial regulation and, second, using some form of mutual recognition strategy at the level of individual jurisdictions. The chapter argues that the European Union had relatively little influence on the first strategy because representation of “Europe” within international standard-setters is still dominated by the individual Member States rather than by the EU institutions. On the other hand, with the adoption of a Union level common rule book, implementation of the second strategy did fall into the hands of Union institutions. The second part of the chapter consists of a case study of the long drawn-out process whereby the EU and the US achieved recognition of each other’s rules on central counterparties for derivatives clearing. Despite the existence at G20 level of an agreement on the central clearing of derivatives, which both the EU and the US sought to implement, achievement of mutual recognition on this topic was slow, marked by bad-tempered interchanges and initially developed through a process likely to highlight differences rather than commonalities. The chapter concludes by exploring some possible explanations for this history and examines the potential operation of the equivalence regime in a post-Brexit world. Financial crisis; international standards; mutual recognition; central clearing; equivalence.
    ISBN: 978 0 19 884217 0
  • L Enriques and Alessandro Romano, 'Institutional Investor Voting Behavior: A Network Theory Perspective' (2019) University of Illinois Law Review 223
    This Article shows how network theory can improve our understanding of institutional investors’ voting behavior and, more generally, their role in corporate governance. The standard idea is that institutional investors compete against each other on relative performance and hence might not cast informed votes due to rational apathy and rational reticence. In other words, institutional investors have incentives to free ride instead of “cooperating” and casting informed votes. We show that connections of various nature among institutional investors, whether from formal networks, geographical proximity, or common ownership, and among institutional investors and other agents, such as proxy advisors, contribute to shaping institutional investors’ incentives to vote “actively.” They also create intricate competition dynamics: competition takes place not only among institutional investors (and their asset managers), but also at the level of their employees and among “cliques” of institutional investors. Employees, who strive for better jobs, are motivated to obtain more information on portfolio companies than may be strictly justified from their employer institution’s perspective, and to circulate it within their network. Cliques of institutional investors compete against each other. Because there are good reasons to believe that cliques of cooperators outperform cliques of noncooperators, the network-level competition might increase the incentives of institutional investors to collect information. These dynamics can enhance institutional investors’ engagement in portfolio companies and also shed light on some current policy issues such as the antitrust effects of common ownership and mandatory disclosures of institutional investors’ voting.
  • P Davies, 'Investment Chains and Corporate Governance' in Louse Gullifer and Jenny Payne (eds), Intermediation and Beyond (Hart 2019)
    Long chains of intermediaries may constrain the right to vote. Information about the voting opportunity may not reach the persons at the end of the chain in time for them to formulate a considered view, and instructions about how those persons wish to vote may not reach the company in time for the vote to be counted (or, perhaps,at all). These problems will be exacerbated if, as is the case in the UK, the person at the end of the chain of intermediaries and who has the economic incentive to vote, is not treated by the relevant corporate law system as the shareholder for the purpose of the exercise of voting rights. So long as voting was regarded as a private matter, it was possible to take a sanguine view of these problems. Various workarounds were available and those at the end of intermediary chains could make use of them, to the extent that the benefi ts of voting were thought to outweigh the costs of the work-arounds. In the current era of shareholder ‘ engagement ’ , where shareholders, especially institutional ones, are under public pressure to vote and to vote thoughtfully, difficulties in actually voting are much less easy to ignore. This chapter explores the operation of the current voting system where there are chains of intermediaries and some possible reforms.
    ISBN: 9781509919901
  • JA Armour, 'Legal Origin and Securities Fraud—A Comment' (2019) Lloyds Maritime and Commercial Law Quarterly 631
  • P Davies and Klaus Hopt, 'Non-Shareholder Voice in Bank Governance: Board Composition, Performance and Liability' in D Busch, G Ferrarini, G Van Solinge (ed), Governance of Financial Institutions (Oxford University Press 2019)
    Starting from the well-evidenced fact that banks with shareholder-focussed corporate governance fared worse in the financial crisis than those without, this paper considers various initiatives and proposals to re-orient board rules in relation to banks. The paper considers three type change. First, increased influence over board composition and behaviour without granting new rights of board representation to any group of persons. In this section we look at influence for the general public interest in bank stability via an increased role for bank supervisors in the selection and monitoring of bank directors and significant bank executives, and at an increased role for long-term creditors, in particular bondholders. The former is partly already in place and for the latter we suggest ways in which changes could be made, mainly via contract. Second, we look at influence via board representation, mainly for creditors but also for the public interest. We are sceptical about the scale of the benefits such representation is likely to afford and point out some of the costs of these proposals. Finally, we look at enhanced liability, whether regulatory, criminal or civil. There are many proposals for change in this area, some very far-reaching. We doubt the benefits of enhanced criminal liability, but think that more enforcement effort, especially in the regulatory field, but also as to civil liability, would yield positive results.
    ISBN: 978-0-19-879997-9
  • P Davies, 'Related Party Transactions: UK Model' in L Enriques and T Troeger (eds), The Law and Finance of Related Party Transactions (Cambridge U P 2019)
    DOI: 10.1017/9781108554442
    Also available in an earlier version as an ECGI working paper: https://ecgi.global/working-paper/related-party-transactions-uk-model
    This paper analyses the regulation of related party transactions in the UK through two comparative lenses, one external, the other internal. The external comparison is between English law and the law on RPTs in the United States, especially in Delaware. The internal comparison is between the English corporate law applying to all companies and the additional rules applicable to companies quoted on the London Stock Exchange, both those with a premium listing on the Main Market and those traded on the Alternative Investment Market. The first external comparison highlights two features of the general regulation of RPTs in the UK. The first is the adherence of English law to the classical concept of a fiduciary and the second is reluctance to use assessment of the substantive fairness of the transaction as a test for the legality of the RPT and, in consequence, its reliance on wholly procedural controls. The first feature made it difficult for the general law to handle RPTs with shareholders, including directors in their capacity as shareholders. The second came into prominence when the private-ordering model which underlies UK company law led to the shift of the procedural controls from the shareholders to the board. For both problems, UK statute law developed some work-arounds, but without comprehensive revision of these underlying characteristics of the general law. The comparison with the rules for publicly traded companies shows how rules might develop when the starting point is a functional one. Substantial shareholders are as much subject to the constraints as directors and fairness opinions are routinely utilised. However, exchanges have become subject to much sharper regulatory competition than national legal systems. Rule-makers are cautious in their use of exchange rules to promote corporate governance objectives which go beyond what is internationally acceptable. As early as 1993 the London Stock Exchange seems to have pulled back from a widespread application of majority-of-the-minority shareholder approval for RPTs and this century it has wavered in its policies towards subjecting controlling shareholders to effective constraints on RPTs.
    ISBN: 978-1-108-42928-3
  • E Fisher, 'Sciences, Environmental Laws, and Legal Cultures: Fostering Collective Epistemic Responsibility ' in Emma Lees and Jorge Viñuales (eds), Oxford Handbook of Comparative Environmental Law (OUP 2019)
    ISBN: 9780198790952
  • JA Armour and H Eidenmueller, 'Selbstfahrende Kapitalgesellschaften?' (2019) 183 Zeitschrift fur das gesamte Handelsrecht und Wirtschaftsrecht 169
    Anwendungen der Knstlichen Intelligenz (KI) werden das Gesellschaftsrecht im Allgemeinen und die Corporate Governance (CG) im Besonderen stark beeinflussen: Am Horizont steht die „selbstfahrende Kapitalgesellschaft“. Wir unternehmen es, einen konzeptionellen Rahmen fur dieUntersuchung von CG-Fragestellungen bei KI-Anwendungen zu entwickeln. Agenturprobleme in Kapitalgesellschaften verlieren an Bedeutung: Algorithmen optimieren eine vorgegebene Zielfunktion. In den Vordergrund rucken Fragen der Zielbestimmung von Kapitalgesellschaften. Wir beschaftigen uns zunachst mit dem Stand der derzeitigen technischen Moglichkeiten. Er wird von Anwendungen im Bereich des Maschinellen Lernens (ML) gepragt. Sodann untersuchen wir die Implikationen der Data Governance fur CG-Fragestellungen, insbesondere hinsichtlich Qualifikation und Verantwortlichkeit von Unternehmensleitern. Anschließend beschaftigen wir uns mit der Zukunft der Kapitalgesellschaft beisteigender KI-Funktionalitat. Hier geht es um die „selbstfahrende tochtergesellschaft“ im Konzern sowie das Zentralproblem der Kalibrierung der Unternehmensziele. Regulatorische Implikationen sehen wir in einem von Regulierungswettbewerb gekennzeichneten Umfeld vor allem in der ex ante-Prufung unternehmenssteuernder Algorithmen sowie in einer strikten Haftung kombiniert mit einer (Haft-)Pflichtversicherung entsprechend gesteuerter Kapitalgesellschaften. Alternativ ist eine unbeschrankte pro rata-Haftung der Anteilseigner gegenuber Deliktsglaubigern in Betracht zu ziehen.
    ISBN: 0044-2437
  • A Briggs, 'Service out: communis error frangit ius' [2019] Lloyd's Maritime and Commercial Law Quarterly 195 [Case Note]
    Analysis of the state of the law on applications for permission to serve out of the jurisdiction in the light of the decision in Kaefer Aislamientos v AMS Drilling
    ISBN: 0306 2945
  • P Eleftheriadis, 'Solidarity in the Eurozone' (2019) Bank of Greece Working Papers Series
    Proposals for Eurozone reform aim to complete its institutional architecture by securing stability without creating moral hazard. Such policy arguments inevitably rely, however, on implicit assumptions about justice, or on what is owed to whom. A common assumption is that member states are solely responsible for what happens to them. This paper, written from the point of view of public law and legal theory, asks if this assumption is correct. The relevant idea is often considered to be that of solidarity. Yet, solidarity is a puzzling concept. Although it is mentioned in the EU treaties, it does not appear to create any clear duties of mutual assistance. Many prominent legal theorists argue that solidarity will only become relevant in the future, when new European institutions bring citizens together under a single Europe-wide political community. This paper argues, however, that these arguments are misleading. They are at least incomplete in that they miss the key role played by corrective justice. Unlike distributive justice, which applies within states but not among states, corrective justice applies to cooperative arrangements creating interdependence. Corrective justice creates a principle of redress, which requires that those who are unfairly burdened by an agreement should be compensated by those who caused the unfairness. Any state that was unfairly burdened by the Eurozone’s flawed architecture, may thus have a claim of redress for the losses it incurred as a result of the unfairness. It follows that the programmes of financial assistance were not merely actions of self-preservation or prudence by the Eurozone. They were also manifestations of an existing European principle of solidarity based on corrective justice
    ISBN: ISSN 1109-6691
  • AE Ezrachi and (co-authored by a group of contributors) , Stigler Committee on Digital Platforms (Chicago University 2019)
    Subcommittee on Market Structure and Antitrust This working group came together to address specific problems arising from the digital platforms’ reach, scale, scope, and use of data. We were asked to examine concerns stemming from the market structure contemporary platforms have created, and to investigate their competitive behavior, including the consequences of network effects that can create barriers to entry for new innovators and entrench incumbents. The global nature of many of today’s platforms, a result of their scale, scope, and business models, creates novel complexities and considerations, particularly a concern that the digital platform may be a unique combination of economic forces that require both new analysis and new public policy. Regulatory authorities throughout the world are now turning their attention to these same questions. This report contributes to this international analytical project by providing some of the necessary frameworks and inputs. We intend it to be a complement to other recent work, as experts across the world wrestle with how to ensure that markets remain open and healthy, allowing beneficial technological and social advancements to continue. Many of our conclusions and suggestions echo the findings of reports that have come out in the past year, and we hope they will be helpful to those reports not yet released. The list of antitrust experts and agencies working on this problem includes Australia, the United Kingdom, Germany, the European Commission, France, Israel, and Japan
  • P P Craig, 'Taxonomy and Public Law: A Response ' (2019) Public Law 281
  • P P Craig, 'The EU, Democracy and Institutional Structure: Past, Present and Future ' in W Heusel and J-P Rageade (eds), The Authority of EU Law, Do we Still Believe in It (Springer 2019)
  • P P Craig, 'The EU, Democracy and Institutional Structure: Past, Present and Future' in A Bakardjieva Engelbrekt and X Groussot (eds), The Future of Europe, Political and Legal Integration Beyond Brexit (Hart Publishing 2019)
  • P P Craig, 'The EU, Democracy and Institutional Structure: Past, Present and Future ' in W Heusel and J-P Rageade (eds), The Authority of EU Law, Do we Still Believe in It? (Springer 2019)

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