Sustainable finance regulation – authoritative governance or market-based governance for fund management?

An innovative form of governance for sustainable investment products has been introduced in the E.U. in order to address the fears of investment mis-selling, as well as to actively steer sustainable investment allocations towards defined causes of sustainability, in particular, environmental sustainability. The E.U.’s sustainable regulation framework is discussed in this paper as an “authoritative” form of governance without being authoritarian. Investment allocation is a matter of market choice but regulation intends to achieve clarity in relation to sustainable costs and achievements in order to influence investor choice. The U.S. and U.K. are also developing reforms in sustainable finance regulation, but are more narrowly focused on anti mis-selling and investor protection. This paper discusses their approaches as fundamentally market-based, in contrast to the E.U.’s, as the industry and investors remain in control of defining sustainability goals, if any, in investment. The paper critically discusses the prospects of market mobilization under these different approaches and what may entail from their regulatory competition

Proportionality in a European Capital Markets Code

The current framework of EU regulation concerning capital markets is complex and partly inconsistent in the way that it is applied in the various Member States. Through the Capital Markets Union (CMU) project the European Union is pursuing the goal of establishing a true single market for capital in Europe. Regulating EU Capital Markets Union: Fundamentals of a European Code is the first of a two-volume series proposing the codification of EU legislature as a way to establish this goal. This book analyses all existing capital markets regulation. It explains the idea of codification, looks at the added value of a European Capital Markets Code, discusses key concepts of the current regimes and elaborates on the goals of the future codification act. The work explores the idea that the provisions spread over numerous rulebooks should be brought together in a single legal act in the form of a regulation and organized in a systematic way to reduce complexity thereby facilitating accessibility of capital markets law. Drawing on the experience of academics from various European countries, this volume discusses possible contents of a European Capital Markets Code, addresses approaches to regulatory reforms and explores the role of private enforcement