- Even finer distinctions have developed, such as “emerging”, “transitional” and “frontier” markets.
- The G7 expanded to 19 countries and the European Union in 1999 due to the financial crises of the late 1990s and a recognition that emerging economies had been excluded from global financial discussion and governance. The countries added in 1999 were Argentina, Australia, Brazil, China, the European Union, India, Indonesia, Mexico, Russia, Saudi Arabia, South Africa, the Republic of Korea and Turkey. In September 2009, the G20 formally replaced the then G8 as the major forum for discussions among finance ministers and central bankers.
- “LSE and Canada's TMX agree merger”, Financial Times, 8 February 2011.
- “Securities regulatory regimes around the world, largely developed on the conceptual basis of segregated national markets, are fast being outpaced by market developments and are finding themselves unable to address effectively the realities of the accelerating integration of global capital markets”. A Unterman, “Exporting Risk: Global Implications of the Securitization of US Housing Debt” (2008) 4(1) Hastings Business Law Journal 77.
- See C Jordan, “Does ‘F’ stand for failure: The Legacy of the Financial Stability Forum”, Legal Studies Research Papers, 2009, Melbourne Law School Research Paper No. 4291–28.
- The Australian Parliament rejected the merger on 5 April 2011 after the Foreign Investment Review Board determined a merger was not in Australia's best interests.
- “There is no serious alternative available. The status quo would entrench the continuation of European financial market fragmentation. This means lost benefits. Lost opportunities… with European savings diverted to foreign market places.” Alexandre Lamfalussy, “Final Report of the Committee of Wise Men on the Regulation of European Securities Markets”, Brussels, 15 February 2001, pp. 1–115, 8 (the “Lamfalussy Report“).
- S Rottier and N Véron, “The New Disintegration of Finance”, Breugel Institute, 10 September 2010, 1–2.
- L Wei and C Chan, “Turmoil Stings Yuan bonds”, Wall Street Journal, 28 September 2011, 1. The term describes the RMB-dominated, Hong Kong-based bond market and is “driven by the amount of RMB deposits available for investment in Hong Kong and by the supply of debt from issuers in mainland China”: L Sanchez, “What Is the Dim Sum Bond Market and Why it Could Be the Next Bubble“, Business Today, Princeton University, 13 August 2010, 1.
- See JC Coffee, “Competition among Securities Markets: A Path Dependent Perspective”, Columbia University Law School, Center for Law and Economic Studies Research Paper No 192, 25 March 2002, 1–32.
- J Wilson, “BaFin Approves Deutsche Börse-NYSE Merger”, Financial Times, 12 September 2011.
- There is a cross-listing alliance consisting of the Hong Kong Exchanges and Clearing, BM&FBovespa of Brazil, the National Stock Exchange of India, the Bombay Stock Exchange, Johannesburg Stock Exchange and the two Russian exchanges that are in the process of merging – Micex and RTS – which will cross-list each others' stock index futures and index options contracts.
- Selling information fl ows and creating or reinforcing vertical “silos” of complementary businesses such as clearing and settlement.
- “The Challenge of Great Exchanges”, Financial Times, 13 February 2011. It was estimated that 37% of revenues of the proposed NYSE-Euronext-DeutscheBörse would have been from derivatives and not traditional equity products.
- J Grant, “Six Emerging Market Exchanges Combine in Cross-listing Alliance”, Financial Times, 13 October 2011.
- The recent bankruptcy of MF Global, with assets of US$41bn is the eighth largest bankruptcy in US history. At the time of writing US$163m of client funds could not be accounted for. T Braithwaite, J Gapper, D McCrum, G Meyer, K Scannell and H Weitzman, “'It Shouldn't Have Taken Positions so Big – Let Alone the One it Did' – Downfall of MF Global”, Financial Times, 5 November 2011.
- Although fiercely defended in the United States. See C Jordan and P Hughes, “Which Way for Market Institutions: The Fundamental Question of Self Regulation” (2007) 4 Berkeley Business Law Journal 205.
- Stephen O'Connor, ISDA Chairman, Managing Director and Global Head of OTC Client Clearing, recently gave an address on derivatives regulation in which he stated: “Should the regulations in each country or region be introduced without consistency, such institutions could be prevented from engaging in cross-border transactions and executing their global risk management strategies efficiently. This could potentially lead to regulatory arbitrage, segmented markets, reduction in liquidity, resulting in reduced market efficiency and increased systemic risk.” S O'Connor, “Chairman's Address”, Morgan Stanley 2011 ISDA Annual Japan Conference, “Shaping the Future of Derivatives“, 27 October 2011.
- In the aftermath of the global financial crisis, an attempt was made to formally consolidate the two major financial regulators in the United States, the SEC and the CFTC; although the attempt failed, more formal cooperative measures have now been undertaken. However, the number of financial regulators in the United States has multiplied, with the creation of new agencies such as the Consumer Financial Protection Bureau, now under the aegis of the Federal Reserve.
- Dodd–Frank Wall Street Reform and Consumer Protection Act 12 USC § 5301.
- Professor Donald Langevoort, speaking recently at the University of Sydney, estimated that only about 20% of Dodd–Frank reforms had been implemented. D Langvoort, “Current US and International Trends in Market and Share Trading Regulation“, speech given at the Supreme Court of New South Wales Annual Corporate Law Conference, “New Trends in Share-market Regulation”, 23 August 2011.
- Three new principles of securities regulation dealing with systemic risk were added to the IOSCO Objectives and Principles of Securities Regulation in June 2010: 1. Principle A (6) “The Regulator should have or contribute to a process to monitor, mitigate and manage systemic risk, appropriate to its mandate.” 2. Principle H (32) “There should be procedures for dealing with the failure of a market intermediary in order to minimize damage and loss to investors and to contain systemic risk.” 3. Principle I (38) “Securities settlement systems and central counterparties should be subject to regulatory and supervisory requirements that are designed to ensure that they are fair, effective and efficient and that they reduce systemic risk.”
- Securities Act of 1933 15 USC 77a–77mm.
- Dating back to the 1930s in the United States.
- The FSA is due to be replaced by two agencies in 2013. These are the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA). The mandate of the PRA is promotion of stable and prudent operation of the financial system, regulation of all deposit taking institutions, insurers and investment banks. The mandate of the FCA is the regulation of conduct in retail, wholesale financial markets and firms outside the scope of the PRA, a mandate which may be wider than the new US Consumer Financial Protection Bureau.
- In the UK, for example, this will now be the mandate of the Financial Conduct Authority to commence in 2013.
- S Goff and E Moore, “Banks Prepare for Deluge of PPI Complaints”, Financial Times, 21 April 2011, 18.
- TIAA-CREF stands for “Teachers Insurance and Annuity Association–College Retirement Equities Fund”. It is a leading provider of retirement benefits to the academic, research, medical and cultural community and has some 3.7 million active and retired employees among its members.
- CALPERS stands for “California Public Employees' Retirement System” and is a leading “activist” institutional investor.
- See “Is TIAA-CREF safe?”, Chronicle of Higher Education, 13 April 2009: ‘Since many professors have TIAA-CREF as the core of their retirement plan,’ writes a reader in response to Pennywise's depiction of the financial crisis (The Chronicle, December 19, 2008), ‘please do an in-depth report on its financial health and how solid its accounts are.' In analogous spirit, Laurie Fendrich, professor of fine arts at Hofstra University, posted a brilliant mock-populist rant on The Chronicle's Brainstorm blog under the title ‘Someone's Gotta Pay.' Fendrich recounts an evening when, sipping a glass of merlot, she fantasized over who to sue for ‘the decline in value in my TIAA-CREF retirement portfolio.' Eventually she settles on her campus TIAA-CREF rep for defrauding her ‘by giving me several pamphlets written in Aquitanian, and insisting on speaking only Aquitanian whenever we would meet – even though he knew full well I could barely speak a word of it.' Available at http://chronicle.com/article/Is-TIAA-CREF-Safe-/44807 (last accessed 29 November 2011).
- FINRA is the acronym for the Financial Industry Regulatory Authority, a self-regulatory organisation and “the largest independent regulator for all securities firms doing business in the United States [overseeing] nearly 4,495 brokerage firms, 163,450 branch offices and 635,515 registered securities representatives. [The] chief role is to protect investors by maintaining the fairness of the US capital markets.” See www.finra.org (last accessed 15 November 2011).
- E Ferran, “The Break-up of the Financial Services Authority”, University of Cambridge Faculty of Law Research Paper Series, Research Paper 10/04, 2010, 1–127, 1.
- For more on the FSF, see Jordan, supra n 6.
- “The FSB has been established to coordinate at the international level the work of national financial authorities and inter national standard setting bodies and to develop and promote the implementation of effective regulatory, supervisory and other financial sector policies in the interest of financial stability. It brings together national authorities responsible for financial stability in 24 countries and jurisdictions, international financial institutions, sector-specific international groupings of regulators and supervisors, and committees of central bank experts.” Financial Stability Board, available at www.financialstabilityboard.org/about/overview.htm (last accessed 10 November 2011).
- CESR was replaced as of 1 January 2011 by a fully fl edged pan-European capital markets regulator, the European Securities and Markets Authority (ESMA). ESMA is one of three newly created pan-European regulators (the other two being the European Banking Authority (EBA) and the European Insurance and Occupational Pensions Authority (EIOPA)) which have replaced the so-called 3L3 committees of the European Union.
Law and Financial Markets Review
Volume 6, 2012 - Issue 2