law-and-finance   7

Lyman Johnson, David Millon - Recalling Why Corporate Officers are Fiduciaries :: SSRN - William & Mary Law Review, Vol. 46, 2005
Lyman Johnson, Washington and Lee U Law School; U of St. Thomas, St. Paul/Minneapolis, MN - School of Law -- David Millon,Washington and Lee U Law School -- For all the recent federal attention to ...corporate officer and director functions, ... state fiduciary duty law makes no distinction between the fiduciary duties of these two groups. (..) The thesis of this article is that corporate officers are fiduciaries because they are agents. (..) drawing on the fiduciary duties of agents for guidance in fashioning modern understandings of corporate officer duties - and differentiating those duties from those of directors - can provide much-needed structure to what otherwise threatens to be an ad hoc enterprise. There are at least 3 benefits of our thesis. (1) state law remains the primary source for establishing the basic framework of corporate governance relations, both through corporate statutes and through judge-made fiduciary duty law. (..) (2) our thesis clarifies immensely why courts can and should more closely scrutinize officer conduct than they now review director performance (..). (3) At a theoretical level, ...our thesis has several implications. (..) we are entering an era when, due to heavier corporate regulation, the entity conception of the firm will be strengthened, as positive law, including agency law, still builds on that understanding of corporate relations. This period follows a span of perhaps 20 years when a highly disaggregated conception of corporate relations - the nexus of contracts theory - has predominated. We also believe that in the policy arguments for and against strong fiduciary duties over the years, virtually no attention has been given to distinguishing whether what is fitting for outside directors in the fiduciary duty area - relatively slack duties - is also fitting for corporate officers. -- saved to briefcase
article  SSRN  corporate_law  financial_regulation  capital_markets  fiduciaries  principal-agent  agents  duties-legal  officers-&-directors  corporate_governance  shareholders  investors  state_law  federalism  federal_preemption  SEC  SROs  corporate_personhood  directors  duty_of_care  duty_of_loyalty  conflict_of_interest  legal_remedies  law-and-economics  law-and-finance 
july 2015 by dunnettreader
Andrew S. Gold, Paul B. Miller, eds. -- Introduction: Philosophical Foundations of Fiduciary Law (Oxford UP 2014) :: SSRN
Andrew S. Gold, DePaul University, College of Law and Paul B. Miller, McGill University Faculty of Law -- This Introduction outlines core questions of fiduciary law theory and provides thematic discussion of the contributions to the volume. The volume includes chapters by Richard Brooks, Hanoch Dagan, Evan Criddle, Deborah DeMott, Avihay Dorfman, Justice James Edelman, Evan Fox-Decent, Tamar Frankel, Joshua Getzler, Andrew Gold, Michele Graziadei, Sharon Hannes, Genevieve Helleringer, Ethan Leib, Daniel Markovits, Paul Miller, Irit Samet, Robert Sitkoff, Henry Smith, and Lionel Smith. -- PDF File: 17 -- Keywords: Philosophy of Law, Legal Theory, Philosophy of Private Law, Private Law Theory, Fiduciary Law, Fiduciary Relationships, Fiduciary Duties, Fiduciary Remedies, Duty of Loyalty, Duty of Care, Duty of Candour -- downloaded pdf to Note
chapter  books  SSRN  philosophy_of_law  jurisprudence  legal_theory  legal_reasoning  fiduciaries  principal-agent  agents  duties-legal  rights-legal  trust  trusts  duty_of_care  duty_of_loyalty  conflict_of_interest  legal_remedies  law-and-economics  law-and-finance  Roman_law  civil_law  common_law  property  inheritance  family_law  downloaded 
july 2015 by dunnettreader
Edward J. Kane -The Flummery of Capital-Requirement Repairs Since The Crisis | The Institute for New Economic Thinking - September 16, 2014
Government safety nets give protected institutions an implicit subsidy and intensify incentives for value-maximizing boards and managers to risk the ruin of their firms. Standard accounting statements do not record the value of this subsidy and forcing subsidized institutions to show more accounting capital will do little to curb their enhanced appetite for tail risk. This paper proposes new accounting and ethical standards that would reclassify the legal status of the financial support a firm receives from the safety net and record it as an equity investment. The purpose is to recognize statutorily that a safety net is a contract that promises to deliver loss-absorbing equity capital to firms at times when no other investors will. The explicit recognition of the public's stakeholder interest in economically, politically, and administratively difficult-to-unwind firms is a first and necessary step toward assigning to their managers enforceable fiduciary duties of loyalty, competence, and care towards taxpayers. These duties are meant to parallel those that managers owe to shareholders, including the right to share in the firm’s profits and to receive information relevant for assessing their investment. The second step in this process is to change managerial behavior: to implement and enforce a series of requirements and penalties that can lead managers to measure and record on the balance sheet of each subsidized firm – as a special class of equity – the capitalized value of the safety-net subsidies it receives from its “taxpayer put.” -- and by defining a class of particularly vexing acts of safety-net arbitrage as criminal theft. -- downloaded pdf to Note
paper  law-and-economics  law-and-finance  corporate_governance  financial_system-government_back-stop  too-big-to-fail  financial_regulation  subsidies-financial_institutions  fiduciaries  accounting  risk-systemic  risk-mitigation  financial_crisis  bailouts  leverage  capital_adequacy  Basle  downloaded  EF-add 
september 2014 by dunnettreader
ESMA website section - Market Infrastructure - Central Counterparties | ESMA
EMIR introduces a harmonised set of organisational, business conduct and prudential requirements for clearing service providers. CCPs interpose themselves between counterparties to a derivative contract, becoming the buyer to every seller and the seller to every buyer. In doing so, CCPs become the focal point for derivative transactions thus increasing market transparency and reducing the risks inherent in derivatives markets. National securities regulators are responsible for the authorisation of EU-based CCPs. For each EU-based CCP a college of supervisors will be established made up of relevant national regulators and ESMA. A non-EU CCP needs to be recognised by ESMA to offer clearing services to EU customers. Prior to recognition the EC must adopt an implementing act determining, amongst other issues, that the legal and supervisory arrangements of the relevant non-EU country imposes legally binding requirements which are equivalent to those contained in Title IV of EMIR. For some jurisdictions ESMA has assessed whether non-EU country legislation meets the EMIR standard through ESMA technical advice to the EC on which to base its decision. ESMA does not actively supervise non-EU CCPs, but following recognition defers to the non-EU CCP’s home supervisor to undertake the day-to-day supervision. ESMA’s role in this respect is that of a standard-setter who further clarifies the CCP provisions under EMIR.
website  EU  EU-law  ESMA  financial_system  financial_regulation  international_finance  market_integration  risk-systemic  derivatives  infrastructure-markets  markets-structure  clearing_&_settlement  liability  regulation-harmonization  regulation-enforcement  cross-border  law-and-finance 
september 2014 by dunnettreader
WFE response to IOSCO consultation on market structure -May 2013 | World Federation of Exchanges
Executive Summary - The WFE commends IOSCO for carefully analyzing the issues raised by the growing and disruptive fragmentation and loss of visibility (darkness) in equity markets. The four sensible recommendations in this consultation progress efforts on the part of regulators and exchange operators worldwide to ensure that equity markets continue to serve investors by becoming ever more efficient, transparent and fair. The WFE supports competition and believes that regulators must promote market designs that foster order interaction in a free, transparent and fair competitive environment. Unfortunately, regulations intended to promote competition between and on-exchanges have in recent years been misused to enable the growth of venues designed to avoid competition. The WFE is concerned about the integrity and efficiency of fragmented, complex and dark markets, particularly as it relates to price formation, surveillance, and market resiliency. Market participants are increasingly discouraged from posting competing prices in lit venues, and evidence indicates that spreads are wider than they could be otherwise. Similarly, diminishing transparency and fair access leads to market complexity that makes markets less capable of handling volatility. Finally, the WFE is concerned that a greater share of equities trading occurs away from full regulatory protection offered by regulated exchanges. The WFE calls into question two common practices in fragmented markets. First, retail and institutional orders are systematically segmented toward venues designed to avoid quote competition, where conflicts of interest are unavoidable. Second, fragmented markets increasingly allow participants to step in front of displayed public limit orders on dark venues with little to no price improvement or block trading. The incentive to segment markets and reduce transparency jeopardizes the price discovery process and can adversely impact costs for all investors. The WFE calls attention to the problems that investors and security commissions face in receiving reliable data from OTC equity trading venues. While the WFE believes that the quality of data, and the costs associated with aggregating data should be weighed when changes to market structure are considered, consistent transparency regulations across venues is fundamental to efficient trading and market surveillance.
The WFE supports recent changes made by the security commissions of Canada and Australia in curbing the excesses of OTC equity trading -- didn't download
report  IOSCO  international_organizations  financial_system  financial_regulation  law-and-finance  disclosure  capital_markets  equity-corporate  OTC_markets  competition-financial_sector  market_integration  markets-structure  HFT  self-regulation 
september 2014 by dunnettreader
Ruud de Mooij, Michael Keen, Victoria Perry - Fixing international corporate taxation | vox 14 September 2014
IMF experience in developing countries points to some distinctive policy issues. Over the past 2 decades, developing countries have signed a huge number of tax treaties. But the evidence on whether they actually affect FDI (plagued by endogeneity issues) is mixed at best. What we do see in our country work are sometimes significant revenue losses, reinforced by the ability of MNCs to route and structure their intra-group payments to exploit treaty arrangements. This has for some while led IMF staff to (cautiously) urge caution in signing treaties – a view... included in the G20-OECD Action Plan of the Base Erosion and Profit Shifting project. [A less prominent but important issue] is the tax treatment of capital gains on the transfer of interest in assets, such as telecoms or mineral licenses – it may be possible to avoid tax in the country where these assets are inherently located by holding them through a chain of offshore companies, and then selling the claim to a low-tax jurisdiction. This has emerged as a macro-relevant concern in several low-income countries (such as Mauritania and Uganda). *-* The underlying policy issue is one of spillovers in international taxation – the effects that, through the ways in which business reacts, one country’s tax decisions have an impact on others. A low or zero tax rate on income arising in a country is only the most obvious route. Network externalities also arise from the signing of treaties (if A, which has a treaty with B, signs another with C, in effect creating a treaty between B and C without consent from B); and countries can compete over tax bases by special regimes for types of income or activities. *-* one has to start by looking at the basic architecture of international taxation. -- closer to where the world may be heading, is moving toward a combination of arm’s-length pricing on transactions where this is relatively easy (such as for most tangibles) and a formulaic profit split where it is not (such as for most intangibles). And there are other suggestions for fundamentally different international tax policies, such as that for destination-based corporate tax, which mimics a VAT but with a deduction for the cost of labour.
international_political_economy  global_economy  global_governance  taxes  tax_havens  MNCs  transfer_pricing  trade-agreements  treaties  international_law  international_economics  law-and-economics  law-and-finance  corporate_citizenship  emerging_markets  G20  OECD_economies  OECD  IMF  FDI  investment-bilateral_treaties  externalities  bibliography  EF-add 
september 2014 by dunnettreader
Katharina Pistor: Creating A Legal Foundation For Finance | The Institute for New Economic Thinking
Katharina Pistor, a grantee of the Institute for New Economic Thinking, professor at Columbia University Law School, and the director of Columbia’s Center on Global Legal Transformation, is developing a Legal Theory of Finance.
In this interview, Pistor focuses in particular on the paradoxical relationship between law and finance. On the one hand, finance needs law to provide credibility. After all, financial assets are contracts, the value of which depends on their legal validation. But on the other hand, changing conditions in the financial world over time necessitate flexibility in law. An overly rigid legal system can render regulation irrelevant if financial innovation ultimately surpasses laws designed for another era. In a worst-case scenario, legal rigidity also can play a role in causing a financial accident. In the United States, the Dodd-Frank legislation represents one response to this challenge. In Europe, the melding of finance and the law is even more complex because policy makers, regulators, and legislators are dealing with 17 different nations, all of which operate with a common currency but in a series of different national jurisdictions with vastly different legal traditions and precedents.
The tension in Europe has become particularly acute in relation to some of the unconventional measures undertaken by the European Central Bank in response to the existential threat to the euro itself - have come under challenge in Germany’s Constitutional Court. Can a national constitutional court effectively invalidate an entire program undertaken by a supranational central bank, which ostensibly is responsible for a common monetary policy? This is one of the issues that Professor Pistor discusses in the exchange below.
video  legal_theory  legal_system  financial_system  financial_regulation  law-and-finance  property_rights  contracts  debt  central_banks  Eurozone  monetary_policy  money  capital_markets  banking  international_political_economy  international_law  international_finance  international_monetary_system 
september 2014 by dunnettreader

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