Relational Practices and the Marginalization of Law: Informal Financial Practices of Small Businesses in Taiwan

This article looks at one component of Taiwan\u27s development experience, the informal financing techniques used by small businesses, to clarify the interaction between the formal Republic of China (ROC) legal system and the network structure of Taiwanese society. The ROC legal system has supported the economic development process directly by regulating economic activity, and indirectly by facilitating the networks of relationships that also regulate economic activity. The relational structure of traditional, rural Chinese society has survived in a modified form in modem Taiwan, and this modem form selectively blends elements of the modem legal system, networks of relationships, and the enforcement services of organized crime. Ideas such as legal centralism and legal pluralism fail to capture the dynamic of the relationship between the ROC legal system and Taiwanese society, so the idea of marginalization of law is offered as a better description

Clash of the Titans: Regulating the Competition Between Established and Emerging Electronic Payment Systems

This article equates the providers of traditional electronic payment services with the Titans of Greek mythology, and the providers of new electronic payment technologies with the Olympians. Professor Winn concludes, however, that unlike the Titans of Greek mythology, these modern Titans appear to be winning in their battle with the upstart Olympians. This article describes the fundamental characteristics of payment systems, reviews the applicable law, and describes the new technologies that were, until quite recently, expected to displace older electronic payment systems. Professor Winn finds that consumers and merchants, by and large, are happy with the existing regulatory structure. And, because of the failure of new technologies to gain significant market share yet, regulators have not yet been obliged to revise existing regulations to take account of these new technologies

Couriers Without Luggage: Negotiable Instruments and Digital Signatures

Prior to the very recent explosion of interest in the Internet, for decades electronic commerce had been conducted on a large scale over closed networks. Since the late 1960s, billions of dollars in funds transfers have been executed over networked computer systems such as the Federal Reserve Wire Network (Fedwire), Clearing House Interbank Payment System (CHIPS), and the automated clearing house system (ACH); billions of dollars of goods have been sold over electronic data interchange networks. These closed, proprietary networks were built during the era of mainframe computer systems and are now being challenged by open networks of distributed client-server computer systems such as the Internet. Assimilating new technologies into existing commercial practices and business models is a daunting task. Probably for this reason, the early debate over the impact of the Internet on business practices seemingly has been dominated by those most familiar with Internet technology. Also, the early discussions of how digital signature technology may be used for business applications were apparently dominated by the technologically proficient, and surprisingly little reference was made to existing electronic commerce applications. As a result, the model of electronic commerce contained within the Digital Signature Guidelines may be of less practical relevance than its drafters hoped. This Article explores how, despite their similarity in aspiration, negotiable instruments law and the Guidelines nevertheless widely diverge in their applicability to actual business transactions. Negotiable instruments law originated in the medieval law merchant, and is the product of a centuries-long colloquy between merchants, lawyers, and courts. The doctrines of negotiability served an important role in enabling commercial transactions. By contrast, digital signature technology is a great novelty in commercial transactions. The fundamental commercial law issue raised by the Guidelines is whether legal standards should build from either a given technology or from business practices associated with the use of that technology. Because there is not yet a body of commercial practices associated with digital signature technology, if the correct protocol is the latter, then no legislation is yet appropriate. However, without some form of standardization, the lack of coordination of Internet electronic commerce systems will present an obstacle to individual transactors, and this lack of guidance may stifle the rate of adoption of the technology. The asymmetric cryptography upon which the Guidelines are based is an essential element to the operation of such a global Internet market. The Guidelines were designed to be a first tentative step from existing commercial systems to this promised land of perfect technological efficiency. This Article suggests, however, that the Guidelines may not be well-rooted enough in contemporary electronic commercial practices to provide a practical bridge from the present to perfect technological efficiency

The Hedgehog and the Fox: Distinguishing Public and Private Sector Approaches to Managing Risk for Internet Transactions

In his essay The Hedgehog and the Fox, Isaiah Berlin used an ancient Greek proverb comparing these animals as a metaphor to express a deep division among thinkers and writers in their understanding of the human condition. In this essay, I extend the metaphor to contrast the differing approaches to risk management taken by the public sector in the exercise of its sovereign functions and that taken by members of the private sector in the conduct of commercial transactions. In light of the differences in these basic approaches to questions of risk management, I will evaluate some widely discussed models of public key infrastructures for administering digital signature authentication systems. The basic model most commonly discussed today can easily be assimilated to the public sector model of risk management, but does not readily permit the incorporation of the most important features of private sector risk management models. As a result, I predict that before digital signature technology will gain widespread use in business technology, further significant progress will have to be made in the design of public key infrastructures. In addition, I argue that a public sector risk management model is not appropriate for new technology distributed by private actors unless there is a consensus that such an indirect subsidy is in the public interest generally, not just in the interest of certain private promoters of the technology. Furthermore, before the public sector adopts digital signature technology, political issues outside the scope of risk management policies will have to be addressed. For example, political issues such as the degree of protection to be granted to citizens\u27 privacy rights within such an infrastructure will have to be resolved before a determination can be made whether the use of such a technology is genuinely in the public interest

Regulating the Use of the Internet in Securities Markets

As use of the Internet and other new technologies in securities continues to expand, the U.S. Securities and Exchange Commission and self-regulatory organizations (SROs) within the securities industry have continued their efforts to adapt their existing regulations to these developments. Although regulators in the United States have provided guidance to market participants on many issues, many other important questions under U.S. securities law remain unanswered. Guidance regard to securities law in other jurisdictions is almost non-existent, though transnational organizations, such as the International Organization of Securities Commissions (IOSCO), are working to remedy this situation. I n 1997 and 1998, the SEC staff issued several releases addressing issues raised by the use of the Internet and other electronic securities markets. These included releases authorizing changes rules to facilitate the use of the Internet or other electronic media in communications with investors. In a release regarding its plain English initiative, the SEC provided additional guidance on the use of the Internet in connection with disclosure documents. In a March 1998 release, the SEC rendered advice regarding the use of the Internet in offshore securities market activities. During 1997 and 1998, the SEC issued a series of no-action letters providing guidance on such issues as the use of an issuer\u27s Internet address in a registration statement, the transmission of public offering road shows over the Internet or through other electronic media, the use of Internet sites to market private placements, the use of Internet bulletin board services to facilitate trading in unregistered securities, and the use of credit cards as a form of payment for securities purchased over the Internet. With regard to secondary market operations, the SEC also issued a proposed rule on regulation of exchanges and alternative trading systems, and an interpretative release regarding electronic trade confirmation services. Although the SEC has provided extensive guidance on certain issues, many important questions about the impact of the Internet on securities law remain unanswered. For example, online chat rooms are an established institution on the Internet. Such chat rooms, however, have often been connected with many cases of fraud and market manipulation. The status of chat rooms offered by Internet brokerage services, rather than independent third-party service providers, has not yet been clarified by the SEC. It is possible that the brokerage firm might be exposed to liability if a brokerage-firm-sponsored chat room were used in a market manipulation scheme, even though no Internet service providers have similarly been targeted by the SEC. Similarly, many corporate counsel confront issues about the use of the Internet in investor relations that have not yet been addressed by the SEC. In the private litigation context, it remains to be seen what standard will be applied should an investor seek remedies based on a material misstatement in a corporate web site as opposed to mandatory disclosure material