Corporate groups have been the subject of much research and debate, but mostly focussing on the position of the controlled company, e.g. the subsidiaries. There has been less focus on the legal position of the parent company in a group and the position of stakeholders in the parent company. To remedy this situation, the article makes a comparative analysis of what duties parent companies have vis-à-vis

This paper investigates the implications of the fair value protections contemplated by the standard corporate contract (i.e., the standard contract form for which corporate law provides) for the entrepreneur–venture capitalist relationship, focusing, in particular, on unavoidable value-destroying trade sales. First, it demonstrates that the typical entrepreneur–venture capitalist contract does institutionalize

Banks are special, and so is the corporate governance of banks and other financial institutions. Empirical evidence, mostly gathered after the financial crisis, confirms this. Banks practicing good corporate governance in the traditional, shareholder-oriented style fared less well than banks having less shareholder-prone boards and less shareholder influence. The special governance of banks and other

One of the problems perceived to be at the heart of the global financial crisis was an amalgamation of various commercial and investment banking activities under one entity, as well as the interconnectedness of the banking entities with other financial institutions, investment funds, and the shadow banking system. This paper focuses on various measures that aim to structurally separate the banking

In recent years modified universalism has emerged as the normative framework for governing international insolvency. Yet, divergences from the norm, specifically regarding the enforcement of insolvency judgments, have also been apparent when the main global instrument for cross-border insolvency has been interpreted too narrowly as not providing the grounds for enforcing judgments emanating from main

Deferred prosecution agreements (DPAs) provide an alternative enforcement tool to tackle economic crime. Prosecutors tailor punishment and remediation measures more accurately to satisfy the principles of prosecution. The companies in question can avoid criminal charges, provided that they comply with agreed terms and conditions. The use of DPAs is conducive to relieving collateral consequences, while

Today, legislators, courts, financial regulators and other actors at the EU and national level face major new challenges in safeguarding public and private interests in an increasingly digital and sustainability-minded environment surrounding financial markets. Innovative ways of addressing tensions between the common good and the individual preferences of market actors are needed to address these

On 10 June 2019 the transposition and implementation deadline for the shareholder engagement rules imposed upon institutional investors and asset managers by the revised Shareholder Rights Directive (SRD II) expired. This article offers an original account of the rationale, the dynamics and the evolution of this EU-driven policy, which aims to promote long-term institutional shareholder engagement

This paper discusses the design of the legal and regulatory framework for using artificial intelligence (AI) in the financial services markets to enhance access to finance (financial inclusion). The author argues that the development of AI should continue to adhere to the regulatory objectives of market safety, consumer protection, and market integrity. However, to ensure equality and fairness, access

The article examines regulatory approaches to individual owner compensation that does not take the form of profit sharing in a hybrid limited liability entity in the three jurisdictions—in a limited liability company (LLC) in the USA, a limited liability partnership (LLP) in the UK (for the sake of accuracy only England will be referred to hereafter), and a small partnership with all members-individuals

Corporate stewardship holds great promise for the improvement of shareholder engagement and the encouragement of more responsible and long-term oriented value creation. This is particularly true since the outbreak of the global COVID-19 pandemic. Many countries have long adopted a best practice code for the stewardship role of institutional investors and asset managers, but Germany has so far refused

Coronavirus is the first global crisis of a digital age and the divergence in policy responses reflects the challenge of navigating an unprecedented global situation under conditions of enormous uncertainty. We ask what lessons can be learned from this experience and identify two, both of which push against mainstream interpretations of recent events. First, and contrary to the view that the crisis

The Audit Regulation was adopted in 2014 to address many of the perceived failings in the market for statutory audits. It introduced mandatory audit firm rotation for public-interest entities, including listed companies, as of 17 June 2020/2023. Mandatory audit firm rotation was also considered by the Dutch legislator in 2012. Therefore, many Dutch listed companies had already switched audit firm in

Several countries and regions around the world, including Singapore, the United Kingdom, and the European Union, are amending their restructuring framework to implement a pre-insolvency mechanism that includes most of the features that exist in the US Chapter 11 reorganization procedure. However, unlike what happens in the United States, where unsuccessful reorganizations lead to Chapter 7 liquidations

This article critically evaluates the significance of the recent EU Preventive Restructuring Directive for small- and medium-sized enterprises (SMEs). Considering the prevalence of SMEs across European economies, it stands to reason that the policy objectives of the Directive were grounded in facilitating the accessibility of restructuring and rescue procedures for such enterprises. However, there

The genesis of MiFID I initiated a fierce scholarly debate on the following question: does MiFID dictate private enforceability of the rules embedded in the directive? More specifically, under a general reference to the effet utile doctrine, certain authors have argued that MiFID requires member states to provide private law remedies for infringements of certain (investor protecting) MiFID provisions

The market discipline of creditors on the risk-taking behaviour of borrowing banks represents a long-lasting debate. Such a debate gained new attention after the post-crisis stream of reforms concerning resolution policy: creditors should be incentivized to make an optimal effort in monitoring their borrowers and, at the same time, their interests have been aligned with the social ones. Many commentators

On the 25th of October 2017, the CJEU rendered a ruling in the Polbud case. The ruling shows that the CJEU is determined to embrace a further liberalization of the free movement of companies in the internal market. The Court’s confidence and no-compromise approach brings with it a number of effects. First of all, the Court has detached the transfer of the registered office from the traditional notion

We argue financial technology (FinTech) is the key driver for financial inclusion, which in turn underlies sustainable balanced development, as embodied in the UN Sustainable Development Goals (SDGs). The full potential of FinTech to support the SDGs may be realized with a progressive approach to the development of underlying infrastructure to support digital financial transformation. Our research

Money as we know and use it is a puzzling phenomenon. Central bank money is not backed by gold or anything else of value. Bank money appears even less reliable. It consists of nothing more than a claim against a bank. And yet—the general public trusts the money generated in traditional ways by the financial industry. Even more surprising is the success of privately-issued digital coins. Especially

The decade since the financial crisis has witnessed a proliferation of various ‘light touch’ financial restructuring techniques in the form of so-called pre-insolvency proceedings. These proceedings inhabit a space on the spectrum of insolvency and restructuring law, somewhere between a pure contractual workout, the domain of contract law, and a formal insolvency or rehabilitation proceeding, the domain

Small businesses are at the heart of most economies. Yet their combination of high risk and opacity with uncertain return dissuades banks and other investors from providing the necessary financial backing to get a business off the ground. Overcoming the significant asymmetries of information is simply not seen as worth the high transaction costs required. Technology—particularly digitalization and

The UK’s collective investment scheme (‘CIS’) sector is a key aspect of UK financial services. With the UK’s departure from the EU, it has also become a politically salient topic, with various Member States competing to lure business to their financial centres in the light of Brexit. Brexit prompts hard choices and a key question arising for the CIS industry is whether the UK should continue to shadow

Asia is witnessing the emergence and significant growth of incorporated joint venture airlines. The joint venture model has been a functional approach since most states restrict foreign ownership in an airline to less than 50% and require it to be effectively controlled by locals. A typical business model is for a parent airline group to have a minority share while local owners hold a majority share

Is there a correlation between the composition of the board of directors and the quantity and quality of information disclosed to the market, and in particular with respect to the disclosure of privileged, price-sensitive information? Our work examines this question with respect to the Italian Stock Exchange, also considering the role of minority-appointed directors in light of the Italian rules on

Aimed at establishing an effective and consistent enforcement of market abuse regulation, the regime introduced by Regulation (EU) No. 596/2014 (‘MAR’) and Directive 2014/57/EU (‘MAD II’) relies on a mix of criminal penalties and administrative sanctions, both of which are subject to the principles of double jeopardy and due process. In the light of a few cases decided by the Court of Justice of the

The UK takeover regulatory landscape must be understood in the context of the interplay between enforcement of the rules and how investors behave in the face of those rules from a corporate governance perspective. From a legal standpoint, the courts have historically never been involved in the regulation of takeover transactions in the UK. However, section 955 of the Companies Act 2006 now enables

Banking law in the EU has experienced profound changes in the last few years, and one of the most radical was the introduction of the single supervisory mechanism (SSM). The decision of the EU Court of First Instance in the case of Landeskreditbank Baden-Württemberg—Förderbank v. ECB is the first to tackle fundamental questions concerning the SSM. This article considers and develops various topics

Class actions, originally developed in the United States, have recently spread internationally. Not every country that has emulated the US’s style of class actions has seen the class action tool being frequently used. Korea, one of the civil law countries that adopted a US-style class action in securities law more than 10 years ago, has a securities class action that serves as an excellent example

Initial coin offerings are a new way for blockchain startups to finance project development by issuing coins or tokens in exchange for fiat money or Bitcoin or other cryptocurrencies. In this article, we start from the current distinction between different types of tokens and argue that it can create confusion and should be at least partially abandoned. We believe that the conceptual difference between

While small and medium-sized enterprises (SMEs) are important for economic growth and employment, they face numerous obstacles in accessing external finance. In this article, we review recent developments in the availability of financing for SMEs in Brazil, focusing on the greater use of equity and debt for SMEs. In assessing the barriers to external financing, we focus on the role of bank characteristics

Shareholder conflicts are said to be the Achilles heel of close corporations. They materialize in different ways and shapes, mostly in the form of majority oppression, minority abuse or shareholder deadlocks. Different cognitive biases and heuristics, as shown by the behavioural law and economics movement currently so much in vogue, contribute to their emergence (such as over-optimism, strategic behaviour

US corporate law and, in particular, Delaware law, which leaves ample room to freedom of contract, has been one of the reasons for the successful creation and financing of startups in Silicon Valley. We analyze the Italian attempt to modernize company law in order to promote startup creation within the wider movement of company law simplification and modernization around Europe. In Italy a suitable

This paper argues that the failed attempt to introduce a mandatory board neutrality rule into EU takeover law was an object lesson that it is difficult to enact rules that are contrary to the corporate law cultures of the majority of the Member States. It provides an account of key factors that prevented enacting a mandatory board neutrality rule in the EU: varying takeover laws and practices; conflicting

In this article, I discuss the rise and fall of regulatory competition in corporate insolvency law in the European Union. The rise is closely associated with the European Insolvency Regulation (EIR, 2002), and it is well documented. The UK has emerged as the ‘market leader’, especially for corporate restructurings. The fall is about to happen, triggered by a combination of factors: the recasting of

The European Court of Justice’s landmark decision in Centros was heralded as creating the preconditions for a vibrant market for incorporations in the EU. In practice, however, today’s corporate landscape in Europe differs little from that of the late 1990s. Very few large companies have made use of their ability to subject themselves to the company law of a Member State in which they are not also

This article looks at the phenomenon of ‘defensive regulatory competition’ in European corporate law following Centros, Überseering and Inspire Art. In order to retain control over the corporate governing private limited entities operating within their territories and to prevent the proliferation of ‘foreign limited’ formations, Member States have modified some of the features of their laws that company

Regulatory arbitrage refers to structuring activity to take advantage of gaps or differences in regulations or laws. Examples include Facebook modifying its terms and conditions to reduce the exposure of its user data to strict European privacy laws, and Uber and other platform companies organizing their affairs to categorize workers as non-employees. This article explores the constraints and limits

In its 1999 Centros decision, the European Court of Justice affirmed that the EU right of establishment protects a corporation’s right to select a state of incorporation. Specifically, Centros rejected the argument that, under the real seat doctrine, the country in which the corporation’s head office is located may deny recognition or apply domestic corporate law to a corporation that is validly formed

This paper argues for the UK to revisit the legal capital (maintenance of capital) doctrine. Leaving the EU could present an opportunity but to reform legal capital just because Brexit may make it possible to do so would have little merit. Three more substantial reasons for revisiting legal capital are developed: the evidence against legal capital being an effective bulwark against short termist corporate

How special is Centros? This contribution places Centros in internal market law. It starts by turning the judgment on its head and imagines an alternative Centros: the judgment that the Danish authorities had wished for and which the Court declined to hand down. The aim of this exercise in legal fiction is to show that the Court could have decided Centros in another way. The choices underpinning Centros

In the UK both the Bank of England and the Financial Conduct Authority have recently carried out experiments using new digital technology for regulatory purposes. The idea is to replace rules written in natural legal language with computer code and to use artificial intelligence for regulatory purposes. This new way of designing regulatory rules is in line with the UK government’s vision for the country

The object of this work is the study of a new model of company introduced in Italy with Law No. 208/2015, the Benefit Corporation, a form of undertaking with joint lucrative and altruistic purposes. The Italian legislator was inspired by the North American Benefit Corporation, which was introduced in many states beginning in 2010, but the Italian regulation is fairly generic and incomplete. Our preliminary

In the last decade, financial regulations have focused on issues posed by systemic risk. The derivatives market has been the subject of structural reforms which have involved both the post-trade—Regulation (EU) No. 648/2012 (‘EMIR’)—and the trading phase—Directive 2014/65/EU (‘MiFID II’) and Regulation (EU) No. 600/2014 (‘MiFIR’). In particular, the post-crisis regulation is characterized by the increasing

Companies are often penalised for violating regulatory requirements of various kinds, including those under competition law. Some of the relevant statutes only impose liability on the company, but not its directors or employees, whose wrongdoing must nonetheless be attributed to the company to render it liable. Where a company infringes competition law or another regulatory statute and seeks to recover

Iceland was hit hard by the financial crisis in 2008. This article discusses the criminal case law handed down in Iceland following the collapse of the Icelandic banks in October 2008. As a result of the banking failure, important legislative measures were taken. A new office of a Special Prosecutor was established by law to deal with potential economic crimes committed during the years leading up

By their very nature, resolution actions under the legal framework for the management of bank insolvencies created by the European Bank Recovery and Resolution Directive (BRRD) and the Regulation establishing the Single Resolution Mechanism (SRMR) come with infringements of rights of shareholders and creditors. Just as any expropriation of private property by public authorities, resolution actions

The author examines whether the concept presented by the CJEU in its Kornhaas judgment of 2015 may also find application when seeking the personal liability of the members (shareholders) of an EU foreign company having its COMI in Germany. The background against which the following article considers this question is the legal concept of Existenzvernichtungshaftung—the personal liability of GmbH shareholders

Weaknesses in investor control over their investments and in warehousing systemic risk in modern Financial Market Infrastructure (FMI) are the result of a combination of market failures and of structural flaws deeply ingrained in modern financial markets. Yet the utility of complex FMI comprising long custodial chains and large global Central Counterparties (CCPs) for the operation of modern markets

EU Regulation 2015/848 (Recast) laid down new rules on the debtor’s ‘centre of main interests’ (COMI) both to make it easier to determine international jurisdiction and to prevent a debtor from fraudulently relocating his/her/its COMI from one Member State to another. However, the terms of the litigation concerning the NIKI case and an in-depth analysis of the Recast demonstrate that this operation

Identity is fundamental in finance: to protect against fraud and crime, to fulfil know-your-customer obligations, and to ensure market integrity. At the same time, identification and know-your-customer rules can be major barriers to accessing financial services. This paper considers the various requirements for identification in the financial sector and the evolving nature of identity. We argue that

It is generally agreed that gaps in sustainable and social finance should be met by increased marketization. However, there are significant challenges in galvanising the investment community used to conventional securities and other investment market instruments. Our article proposes using technological innovations in fund-raising, observed in the initial coin offerings (ICOs) market, to transform

In a technology-driven, digital world, many of the largest and most successful businesses now operate as ‘platforms’. Such firms leverage networked technologies to facilitate economic exchange, transfer information, connect people, and make predictions. Platform companies are already disrupting multiple industries, including retail, hotels, taxis, and others, and are aggressively moving into new sectors

Since the financial crisis, various policy initiatives have been adopted in the UK with a view to improve access to finance for SME businesses. One of these initiatives is the bank referral scheme. Under this scheme, incumbent banks must pass on information about SMEs (with an SME’s consent) that were unsuccessful in securing bank funding, to so-called finance platforms whose role is to match SMEs

This article argues that there are many questions that lawyers might ask, and conversations that they might have, about smart contracts; that some questions that are asked are more important than others; and that there are some questions that are not asked but which should be asked. First, it is argued that the question that preoccupies ‘coherentists’ (concerning the application of the law of contract

Current shareholder engagement systems face large classical inefficiencies. First, due to the large chains of intermediaries in the current securities models, transaction costs are high and shareholder votes and other information are not always correctly transmitted between shareholders and issuers. Recent cases including DNick Holding and T. Rowe Price show the ‘absurdness’ of the current systems

There is a wide consensus in European capital market law that a sound legal framework for the financial sector should rest on a strong supervisory and sanctioning regime. According to this rationale and following the paradigm of competition law, the new legal framework in European capital market law provides for high-magnitude pecuniary sanctions. The new sanctioning regime does not entail special

This article analyzes market reaction to the introduction into Italian legislation of a statutory system of (IPO) prospectus civil liability enacted in April 2007 on the basis of Directive 2003/71/EC. In particular, we study the effects of the new regulation on gatekeepers, such as underwriters and auditors who are commonly qualified as information intermediaries. We analyse the effects on average

Various corporate law and governance theories inform us that board independence, management ownership and blockholder ownership are important elements of the overall corporate governance system. The empirical evidence on the effectiveness of these elements is, however, mixed at best. Moreover, the results and conclusions of prior theoretical and empirical research are typically country-specific and

The difficulties of the effective rescue of multinational corporate groups (MCGs) in the EU have long been recognized. The limitations of the existing MCG rescue solutions, including substantive consolidation, procedural consolidation and procedural cooperation, mean that there is no panacea for preserving the value of financially distressed MCGs for creditors. It seems that a possible way to preserve