Around Oxford Around Oxford Law image
 

Law and Finance — Overview

MSc webiste

The Law Faculty and the Saïd Business School of the University of Oxford launched an MSc in Law and Finance in October 2010. This new degree is a full-time nine-month programme, offering students with a prior background in law the chance to develop an advanced interdisciplinary understanding of the economic and financial context within which regulatory frameworks seek to operate. It combines a highly analytic academic core with tailor-made practical applications derived from continuing collaboration with professional and regulatory organisations. The degree should particularly appeal to those with a legal background seeking to advance a career in Corporate Law, Corporate Finance or Regulation.



lawfin microsite logo
For more detailed information about our work in this area, see also the dedicated Oxford Finance network website

This theme contains two subjects, namely: Law and Finance and Principles of Financial Regulation


Law and Finance

News

Doctoral Funding Opportunities in Law and Finance

The Global Law in Finance Network (GLawFiN) is an interdisciplinary network of scholars located at Columbia University (New York), the University of Oxford (Oxford) and the House of Finance of Goethe-University (Frankfurt) exploring issues at the intersection of law and finance […]

Masters in Law and Finance Alumni Reunion 2013

The alumni reunion of the Masters in Law and Finance programme (MLF) was held on Friday 15 March at the offices of Hogan Lovells in London […]

Vancouver Alumni Tea Party

photo of Dan Awrey

In conjunction with the University’s North American reception in Vancouver on 18 March 2013, the Faculty of Law hosted a tea party for Law alumni […]

Discussion Groups

These self-sustaining groups are an essential part of the life of our graduate school. They are organised in some cases by graduate students and in others by Faculty members and meet regularly during term, typically over a sandwich lunch, when one of the group presents work in progress or introduces a discussion of a particular issue or new case. They may also encompass guest speakers from the faculty and beyond.

Law and Finance Workshop

Publications

Showing selected publications sorted by year, then title  [change this]

Showing key publications in this field, as selected by the author
Change to sort them by title | name | type OR
Show All 30 | Recent publications

2013

WG Ringe, 'Hedge Funds and Risk-Decoupling – The Empty Voting Problem in the European Union' (2013) 36 Seattle University Law Review 1027 [...]

Negative risk-decoupling, otherwise known as empty voting, is a popular strategy amongst hedge funds and other activist investors. In short, it is the attempt to decouple the economic risk from the share’s ownership position, retaining in particular the voting right without risk. This paper uses three perspectives to analyse the problems created by negative risk-decoupling: an agency costs approach, an analysis of information costs, and a perspective from corporate finance. It shows how risk-decoupling is a type of market behaviour that creates significant costs for market participants, in particular existing shareholders and potential investors. The paper then develops regulatory responses, envisaged particularly for EU level lawmaking, but also raises underlying issues on a more general level. Whilst several proposed regulatory tools are rejected, the paper prefers a solution that uses continuous transparency as the cornerstone. In addition, it suggests that in certain individual cases, national regulators should be empowered to suspend activists’ voting rights. The paper concludes by offering a concrete legislative proposal, amending the European Transparency Directive.


ISBN: 1078-1927

D Awrey, 'Toward a Supply-side Theory of Financial Innovation' (2013) 41:2 Journal of Comparative Economics 401

2012

M Kettunen and WG Ringe, 'Disclosure Regulation of Cash-Settled Equity Derivatives – an Intentions-Based Approach' [2012] Lloyd's Maritime and Commercial Law Quarterly 227 [...]

In capital markets around the world, calls for greater transparency regarding holdings of cash-settled equity derivatives (in particular Contracts for Difference, CfDs) have arisen due to the increased use of CfDs to gain control or to influence the management of prominent companies on all major European stock exchanges. They have been used in this manner due to an emerging practice that permits a CfD holder to capture the shares to which the CfD arrangement relates (without entering into any further express or implied agreements to do so), thereby acquiring a de facto control position in the target company. The UK was among the first countries to extend its shareholder disclosure regime to cover CfDs. Positions above the trigger threshold of 3 per cent must be disclosed as if they were shares enti-tling the holder to voting rights in the target company. Two alternatives were considered when pre-paring this new regulation: firstly, a general disclosure obligation of all economic long positions and secondly, a safe harbour regulation with exemptions from the requirement to disclose certain CfD transactions. Ultimately, the first option was preferred, yet not on the basis of its own merits but be-cause the safe harbour alternative was considered too complicated and difficult to enforce. This paper evaluates disclosure regulation of cash-settled equity derivatives and assesses the ef-fectiveness and suitability of the disclosure regulation under chapter 5 of Disclosure and Transparency Rules (DTR) in the UK with comparison to the relevant US rules and case law. We argue that the UK made the wrong choice of disclosure regime for CfDs. It fundamentally misunderstood the nature of the underlying problem relating to CfDs. As this article explains, the key problem related to CfDs is not the economic interest which CfDs convey per se, but rather the hedging structures that market participants have developed to facilitate the use of CfDs to acquire control of companies by stealth. This particular mischief would have been better targeted by an intentions-based disclosure regulation requiring disclosure of CfD positions only in cases where the CfD holder intends to launch a takeover or to otherwise influence the target company’s strategy and operations. Instead, the UK market is saddled with a general disclosure obligation with only very limited exceptions. This disclosure obligation is too wide in scope, places an undue burden on market partici-pants and ultimately acts as a deterrent to CfD transactions. This article argues that the UK should move away from the current general disclosure obligation towards intentions-based disclosure to re-move the current fetter on the CfD market, while still tackling the underlying mischief.


ISBN: 1859789781

J Armour, BS Black and BR Cheffins, 'Is Delaware Losing its Cases?' (2012) 9 Journal of Empirical Legal Studies 605 [...]

Delaware’s expert courts are seen as an integral part of the state’s success in attracting incorporation by public companies. However, the benefit that Delaware companies derive from this expertise depends on whether corporate lawsuits against Delaware companies are brought before the Delaware courts. We report evidence that these suits are increasingly brought outside Delaware. We investigate changes in where suits are brought using four hand-collected data sets capturing different types of suits: class action lawsuits filed in (1) large M&A and (2) leveraged buyout transactions over 1994–2010; (3) derivative suits alleging option backdating; and (4) cases against public company directors that generate one or more publicly available opinions between 1995 and 2009. We find a secular increase in litigation rates for all companies in large M&A transactions and for Delaware companies in LBO transactions. We also see trends toward (1) suits being filed outside Delaware in both large M&A and LBO transactions and in cases generating opinions; and (2) suits being filed both in Delaware and elsewhere in large M&A transactions. Overall, Delaware courts are losing market share in lawsuits, and Delaware companies are gaining lawsuits, often filed elsewhere. We find some evidence that the timing of specific Delaware court decisions that affect plaintiffs’ firms coincides with the movement of cases out of Delaware. Our evidence suggests that serious as well as nuisance cases are leaving Delaware. The trends we report potentially present a challenge to Delaware’s competitiveness in the market for incorporations.


ISBN: 1740-1461

2011

WG Ringe and A Hellgardt, 'An international dimension of issuer liability - Liability and choice of law from a transatlantic perspective' (2011) 31 Oxford Journal of Legal Studies 23 [...]

The integration of the European capital markets makes progress and has led both issuers and investors being active on various markets on both sides of the Atlantic. In times of financial crises, this brings one question into the centre of attention which had not been discussed exhaustively before: In the situation of a securities liability towards investors in an international context, which is the applicable law to the liability claim? The harmonisation of private international law rules in Europe gives rise to new reflections on the problem of international issuer liability. In the United States, on the other hand, the Supreme Court has just granted certiorari in a ‘foreign-cubed’ securi-ties class action case and will thus rule for the first time on matters relating to the inter-national application of the US securities regulation soon. This paper understands the role of issuer liability in a broader context as a ‘corporate governance’ device and, from this starting point, develops a new approach to the legal problem of cross-border securities liability.


ISBN: 0143-6503

J Armour and W.-G. Ringe, 'European Corporate Law 1999-2010: Renaissance and Crisis' (2011) 48 Common Market Law Review 125 [...]

European corporate law has enjoyed a renaissance in the past decade. Fifteen years ago, this would have seemed most implausible. In the mid–1990s, the early integration strategy of seeking to harmonize substantive company law seemed to have been stalled by the need to reconcile fundamental differences in approaches to corporate governance. Little was happening, and the grand vision of the early pioneers appeared more dream than ambition. Yet since then, a combination of adventurous decisions by the Court of Justice, innovative approaches to legislation by the Commission, and disastrous crises in capital markets has produced a headlong rush of reform activity. The volume and pace of change has been such that few have had time to digest it: not least policymakers, with the consequence that the developments have not always been well coordinated. The recent financial crisis has yet again thrown many – quite fundamental – issues into question. In this article, we offer an overview that puts the most significant developments of this decade into context, alongside each other and the changing patterns of corporate structure in European countries. Such developments cover, for instance, corporate mobility, corporate freedom of establishment, golden shares case law, as well as the Commission’s Company Law Action Plan CLAP and Financial Services Action Plan FSAP. Harmonization of Member States’ company laws on the rules governing listed companies and the facilitation of cross-border restructuring are also examined.


ISBN: 0165-0750

2010

D Awrey, 'The FSA, Integrated Regulation and the Curious Case of OTC Derivatives' (2010) 13:1 University of Pennsylvania Journal of Business Law 101

2009

J Armour, 'Enforcement Strategies in UK Corporate Governance: A Roadmap and Empirical Assessment' in John Armour and Jennifer Payne (eds), Rationality in Company Law (Hart Publishing 2009) [...]

Shares in publicly-quoted UK companies are, similarly to those in their US counterparts, dispersed amongst many holders. The central problem of corporate governance for UK listed firms is therefore rendering managers accountable to shareholders. This paper investigates the way in which the mechanisms used to control these managerial agency problems are enforced. It provides a roadmap of the enforcement strategies employed, and a first approximation of their empirical significance. The results suggest three stylised facts about the UK corporate governance system. First, shareholder lawsuits are conspicuous by their absence. Formal private enforcement plays little or no role in controlling managers. Secondly, and contrary to leading accounts in the economic literature, it is public, rather than private, enforcement which dominates in relation to listed companies. However, the lion's share of the interventions by the relevant agencies - the Takeover Panel, the Financial Reporting Review Panel, and the Financial Services Authority - is of an informal character, not resulting in any legal action. Suasion, rather than sanction, is the order of the day. Thirdly, a simple divide between public and private enforcement fails fully to take account of the role played by institutional investors in the UK, who have engaged systematically in informal private enforcement activity. Strong informal private enforcement has historically therefore been the flipside, in the UK, of weak formal private enforcement.


ISBN: 9781841138060

Courses

The courses we offer in this field are:

Postgraduate

MSc (Master's in Law and Finance)

Finance I

This course lays out the foundations of Finance with a particular emphasis on the financial decisions taken by firms. We begin by developing a framework for the financial evaluation of investment decisions. We introduce the concept of discounting and the net present value as a tool for investment appraisal. The course then moves on to develop a measure of risk and presents a model that allows us to evaluate risk (the Capital Asset Pricing Model). We then introduce another important financial decision by the firm, namely through what source (debt, equity etc.) to fund its activities. We will use insights from the modelling of risk to understand how different sources of finance affect the riskiness and therefore the price of financial claims issued by the firm. The course then shows how the previous models and concepts can be used by firms to evaluate investment proposals and take optimal capital budgeting decisions. Finally, we will discuss tax implications and corporate governance issues related to firms’ financial decisions.

Finance II

This course builds on and develops the concepts covered in Finance I. We consider asymmetric information and capital structure; dividend and share repurchase policy; issues in capital budgeting; the concept of adjusted present value; the nature and pricing of financial and real options, and the valuation of complex capital investment projects. Students are also expected to carry out a case analysis of payout policy.

First Principles of Financial Economics

This class builds the conceptual foundation required for the economic analysis of corporate financial policy, competitive asset markets and the regulation of both corporations and financial markets. The course?s lectures will focus on: rationality, the Coase Theorem, property rights, competitive markets, the market for risk, market failures, asymmetries of information, and aggregation of information.

Law and Economics of Corporate Transactions

This course, which runs during the Hilary and Trinity terms, gives students a toolkit for structuring common corporate transactions. It acts as the fulcrum for the programme as a whole. We begin with sessions on the economic theory of contracting: the nature of the agency, hold-up costs, and other strategic behaviour to be expected in a contracting relationship. We then move on to consider six practical applications to well-known corporate transactions. In each case, an overview of the relevant legal background is introduced in class, and students are then given document packs based on real transactions to work on in a group before presenting their work to the class and academics from the disciplines of law, finance and economics. Practitioners from the leading law firms who completed the transactions under review will then talk to students about the case studies, giving their views and explaining what happened in the real scenario.


People

Law and Finance teaching is organized by a Subject Group convened by:

John Armour: Hogan Lovells Professor of Law and Finance

in conjunction with:

Dan Awrey: Associate Professor of Law and Finance
Paul Davies: Allen & Overy Professor of Corporate Law
Judith Freedman: Pinsent Masons Professor of Taxation Law
Louise Gullifer: Professor of Commercial Law
Jennifer Payne: Professor of Corporate Finance Law
John Vella: Senior Research Fellow at the Oxford University Centre for Business Taxation

Also working in this field, but not involved in its teaching programme:

Joshua Getzler: Professor of Law and Legal History
Jeremias Prassl: Supernumerary Fellow in Law
Wolf-Georg Ringe: Departmental Lecturer
Kristin van Zwieten: Clifford Chance Associate Professor of Law and Finance

[top]


Principles of Financial Regulation

Publications

Showing selected publications sorted by year, then title  [change this]

Showing key publications in this field, as selected by the author
Change to sort them by title | name | type OR
Show All 7 | Recent publications

J Gordon and WG Ringe, 'Resolution in the European Banking Union: A Transatlantic Perspective on What it Would Take' (2014) Columbia Law and Economics Working Paper No. 465 [...]

The project of creating a Banking Union is designed to overcome the fatal link between sovereigns and their banks in the Eurozone. As part of this project, political agreement for a common supervision framework and a common resolution scheme has been reached with difficulty. However, the resolution framework is weak, underfunded and exhibits some serious flaws. Further, Member States’ disagreements appear to rule out a federalized deposit insurance scheme, commonly regarded as the necessary third pillar of a successful Banking Union. This paper argues for an organizational and capital structure substitute for these two shortcomings that can minimize the systemic distress costs of the failure of a large financial institution. We borrow from the approach the Federal Deposit Insurance Corporation (FDIC) has devised in the implementation of the “Orderly Liquidation Authority” under the Dodd Frank Act. The FDIC’s experience teaches us three important lessons: first, systemically important institutions need to have in their liability structure sufficient unsecured (or otherwise subordinated) term debt so that in the event of bank failure, the conversion of debt into equity will be sufficient to absorb asset losses without impairing deposits and other short term credit; second, the organizational structure of the financial institution needs to permit such a debt conversion without putting core financial constituents through a bankruptcy, and third, a federal funding mechanism deployable at the discretion of the resolution authority must be available to supply liquidity to a reorganizing bank. On these conditions, a viable and realistic Banking Union would be within reach—and the resolution of global financial institutions would be greatly facilitated, not least in a transatlantic perspective.


D Awrey, 'Complexity, Innovation and the Regulation of Modern Financial Markets' (2012) 2:2 Harvard Business Law Review 235

D Awrey, 'The Limits of EU Hedge Fund Regulation' (2011) 5:2 Law and Financial Markets Review 119

Courses

The courses we offer in this field are:

Postgraduate

BCL

Our taught postgraduate programme, designed to serve outstanding law students from common-law backgrounds

Principles of Financial Regulation

Financial regulation is subject to rapid change, and its optimal content is hotly debated. This course will introduce you to the underlying principles which various forms of financial regulation seek to implement. The focus is on the financing of firms and their interaction with capital markets. Students completing this course will be able to understand the regulatory goals of market efficiency, investor protection, financial stability and competition, and the principal regulatory strategies that are employed to try to bring these about in relation to financial markets and financial institutions. The course will conclude with a consideration of the structure of financial regulators, both at the domestic and international level. Students having taken the course will be able to assess critically new developments in financial regulation and their implementation in novel contexts.The course is co-taught by Professor John Armour, Mr Dan Awrey, Professor Paul Davies, Professor Colin Mayer and Ms Jennifer Payne

MJur

Our taught postgraduate programme, designed to serve outstanding law students from civil law backgrounds.

Principles of Financial Regulation

Financial regulation is subject to rapid change, and its optimal content is hotly debated. This course will introduce you to the underlying principles which various forms of financial regulation seek to implement. The focus is on the financing of firms and their interaction with capital markets. Students completing this course will be able to understand the regulatory goals of market efficiency, investor protection, financial stability and competition, and the principal regulatory strategies that are employed to try to bring these about in relation to financial markets and financial institutions. The course will conclude with a consideration of the structure of financial regulators, both at the domestic and international level. Students having taken the course will be able to assess critically new developments in financial regulation and their implementation in novel contexts.The course is co-taught by Professor John Armour, Mr Dan Awrey, Professor Paul Davies, Professor Colin Mayer and Ms Jennifer Payne

MSc (Master's in Law and Finance)

Principles of Financial Regulation

Financial regulation is subject to rapid change, and its optimal content is hotly debated. This course will introduce you to the underlying principles which various forms of financial regulation seek to implement. The focus is on the financing of firms and their interaction with capital markets. Students completing this course will be able to understand the regulatory goals of market efficiency, investor protection, financial stability and competition, and the principal regulatory strategies that are employed to try to bring these about in relation to financial markets and financial institutions. The course will conclude with a consideration of the structure of financial regulators, both at the domestic and international level. Students having taken the course will be able to assess critically new developments in financial regulation and their implementation in novel contexts.The course is co-taught by Professor John Armour, Mr Dan Awrey, Professor Paul Davies, Professor Colin Mayer and Ms Jennifer Payne


People

Principles of Financial Regulation teaching is organized by a Subject Group convened by:

John Armour: Hogan Lovells Professor of Law and Finance

in conjunction with:

Dan Awrey: Associate Professor of Law and Finance
Paul Davies: Allen & Overy Professor of Corporate Law
Jennifer Payne: Professor of Corporate Finance Law
Wolf-Georg Ringe: Departmental Lecturer

[top]


Page updated on 13 February 2014 at 12:18 :: Send us feedback on this page

Policies on: cookies :: freedom of information :: data protection