The legal framework for financial advertising:curbing behavioural exploitation

Policy makers and behavioural finance scholars express growing concern that marketing practices by financial institutions exploit retail investors’ behavioural biases. Investor protection regulation should thus address these marketing practices and include mechanisms curbing behavioural exploitation. That raises the question whether the marketing communications regime of the new Markets in Financial Instruments Directive can live up to this demand. This article develops a regulatory model that integrates behavioural finance insights into the new marketing communications regime. It then determines how regulatory authorities can apply this model when they interpret and apply specific regulatory requirements. It demonstrates how a regulatory authority or a court can translate empirical behavioural finance research findings into legal arguments when assessing whether marketing practices can significantly distort a model investor’s decision-making process. The article further establishes that the detailed requirements imposed on investment firms by the new Markets in Financial Instruments Directive are necessary in order to protect investors from behavioural exploitation. Finally, the article submits policy proposals that aim to protect investors more effectively from behavioural exploitation

Contextualizing legal norms: a multi-dimensional view of the 2014 legal capital reform in China

This paper intends to shed light on the contentious theme of the reception of legal transplantation in the host environment, by examining the 2014 legislative reform of legal capital in China, which at least on paper imitates the enabling settings of US Revised Model Business Corporation Act (RMBCA). The paper looks at the interconnections between national-specific contextual elements, the resultant complexities, and the spillover effects of transplanted configurations in the unique Chinese socio-cultural setting, implicating the discrepancy between the ‘law in practice’ and the borrowed words ‘on the books’, and suggesting the importance of gaining a holistic understanding of ‘law’ involving the legal traditions in both the donor country and the recipient nation

Takeover Bids European Law and Corporate Governance

Le norme relative all'offerta pubblica d'acquisto (OPA) sono pacificamente considerate un elemento centrale nel dibattito in tema di corporate governance. Il rischio di un'OPA – e del conseguente avvicendamento nel controllo della società – dovrebbero motivare gli amministratori ad agire nel miglio interesse degli azionisti (c.d. disciplinary mechanism). Le norme europee sull'OPA sono dettate nella Direttiva 2004/25/EC, che trova applicazione alle offerte di strumenti finanziari di emittenti assoggettati agli ordinamenti degli Stati Membri. Il lavoro analizza le regole europee sull'OPA, sottolineando le diverse scelte di attuazione compiute, ove possibile, dai singoli Stati Membri. Il lavoro si occupa inoltre del processo di riforma della Direttiva che dovrebbe basarsi, innanzitutto, sui vantaggi e gli svantaggi dell'applicazione della Direttiva registrati dal 2004 ad oggi.The rules on takeover bids are generally considered to be an important factor within the debate on corporate governance. The risk of a takeover bid – and of a consequent change in company control – should motivate a company’s board to act in the best interests of the shareholders (the so-called disciplinary mechanism). The European rules on takeover bids are enshrined in Directive 2004/25/EC (which is also known as the Thirteenth Directive on Company Law), which applies to bids for securities of companies (issuers) governed by the laws of Member States. This chapter analyses the European rules on takeover bids, and highlights certain national options for implementing the Directive, although a revision of the European Directive, which will be based, among other things, on an examination of the advantages and disadvantages of its application, has been under way since 2004. The chapter also considers the revisions currently being proposed by the European Commission and the European Parliament