Private International Law-Making for the Financial Markets

This article argues that transnational financial transactions create new opportunities for private groups to influence legal and regulatory rules. Whereas the harmonization of financial law that follows from the increasing significance of transnational transactions looks as though it occurs through processes which are public, state-centred and transparent I describe three ways in which private and opaque processes have a significant influence on policy development in the area of financial law. These are private international law-making through private involvement in public rule-making processes, through contracting, and through the actions of private sector regulatory entrepreneurs

Demutualization of Financial Exchanges: Business as Usual

The article begins by outlining some of the history of mutual business forms, and the recent demutualization movement. Then, after examining the idea of exchanges as proprietary businesses, the article examines three new problems caused by demutualization: how shares in an exchange will be traded; how a proprietary exchange can function as a regulator; and the risk that a proprietary exchange will become a take-over target. The article concludes that there is no perfect arrangement for trading in an exchange\u27s shares; that, if proprietary exchanges are allowed to act as regulators, they should be subject to some constraints as to how they perform this function; and that, contrary to the ordinary case where we have reason to believe that markets discipline firms, a vigorous market for control of exchanges could have harmful effects. The concern that underlies these conclusions is a concern that a country\u27s national interest in protecting its domestic capital markets for the benefit of domestic enterprise and investors is likely to be undermined in a world where exchanges act just like any other business.

Transatlantic Misunderstandings: Corporate Law and Societies

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