Disclosure and Financial Market Regulation

Enriques, Luca; Gilotta, Sergio

doi:10.1093/oxfordhb/9780199687206.013.19

Cited by 3 publications

(1 citation statement)

References 9 publications

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“…190 For instance, Fleckner notes that the price formation process under ideal circumstances will work to establish equilibrium prices that accurately reflect market supply and demand in a manner that is transparent and fair, providing equal treatment of traders. 191 the extensive sets of rules governing the disclosure and handling of information 192 and determining the design of the market structure play an important role in the price formation process and the concrete outcomes of each transaction. 193 If informed investors shy away from market participation because they perceive the market to be structured to their disadvantage, price formation will suffer and market prices less informative, something which is detrimental also in a societal perspective.…”

Section: Notions Of Fairness and Integrity In The Context Of Financia...mentioning

confidence: 99%

Fairness and Integrity in High-Frequency Markets – A Critical Assessment of the European Regulatory Approach

Myklebust¹

2020

EULR

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Over the past decades, financial markets have been fundamentally transformed by technological advances in combination with regulatory and institutional change. This has produced highly competitive and fragmented financial markets. It is in this market environment that the ultra-fast segment of high-frequency trading (HFT) has materialised. European regulators have addressed the potential adverse market impact of HFT in terms of increased systemic risk (e.g. ‘flash crashes’) and market abuse through provisions in MiFID II and in the MAR. But there is also an additional concern that so far has received less regulatory attention – the question of whether HFT is fair. This article explores whether and how HFT raises fairness-related concerns against the backdrop of the overarching policy goal of maintaining confidence in the financial markets. Finding that HFT does indeed raise such concerns, it then asks whether the newly instituted provisions on algorithmic trading and HFT in MiFID II and MAR do anything to alleviate this problem. The answer is to a certain extent yes. However, significant concerns remain unaddressed by the new regulatory context. The article suggests other provisions in MiFID II that in the author’s view should be assessed with a view to target fairness-related concerns raised by HFT. High-frequency trading, algorithmic trading, fairness, market microstructure, MiFID II, unfair market practices, market confidence, market integrity, conflict of interest, systemic risk

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Section: Notions Of Fairness and Integrity In The Context Of Financia...mentioning

confidence: 99%

Fairness and Integrity in High-Frequency Markets – A Critical Assessment of the European Regulatory Approach

Myklebust¹

2020

EULR

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Persons and Organizations

Grundmann

Micklitz

Renner

2018

Silent Life and Silent Language

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Will the EU Commission Successfully Integrate Sustainability Risks and Factors in the Investor Protection Regime? A Research Agenda

Siri

Zhu

2019

Sustainability

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Building a common EU framework for sustainable finance undoubtedly implies the integration of sound and sustainable processes and skills across the whole structure and governance of financial institutions. Consequently, a new financial paradigm is going to be needed, which will require the strengthening of investor care and protection, so contributing to the restoration of trust in the financial sector. In particular, on 18 December 2018, the European Securities and Markets Authority (ESMA) launched two public consultations on draft technical advice for the integration of sustainability risks and factors into the Directive on Markets in Financial Instruments (MiFID), the Alternative Investment Fund Managers Directive (AIFMD), and the Undertakings for Collective Investment in Transferable Securities Directive (UCITS) regimes, with the aim to clarify the so-called fiduciary duties and to increase transparency in the financial services industry. However, the success of the EU initiatives on investor protection regulation may be seriously endangered by the existence of many challenges, weaknesses, and contradictions raised by economists and stakeholders in relation to the definition of sustainability, ESG data availability and reliability, the development of an EU taxonomy, conflicts of interest, product governance, and suitability assessment. This paper starts by briefly analyzing the recent developments of the regulation of sustainable finance at the global level, then offers a more detailed view on the establishment of a common regime on sustainable finance in the EU, with particular reference to the action plan ‘Financing Sustainable Growth’. Then, it examines the recent proposals for regulation on sustainable finance, specifically considering the barriers to the integration of sustainability risks and factors in the EU investor protection regulation—with particular reference to investment services—with respect to its four main dimensions: (1) disclosure of product information, (2) conduct of business (COB) rules, (3) product governance and intervention, and (4) financial education. The paper concludes that the EU reforming proposals, though admirable, risk oversimplifying a complex issue that cannot be easily solved without considering its practical implications on each category of financial operators in the performance of different financial services.

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Disclosure and Financial Market Regulation

Cited by 3 publications

References 9 publications

Fairness and Integrity in High-Frequency Markets – A Critical Assessment of the European Regulatory Approach

Fairness and Integrity in High-Frequency Markets – A Critical Assessment of the European Regulatory Approach

Persons and Organizations

Will the EU Commission Successfully Integrate Sustainability Risks and Factors in the Investor Protection Regime? A Research Agenda

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