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Disputes involving emerging technology, often leave a grey area on applicable law, as it is unlocated in the physical world. The problem with crypto-assets is partly driven by their underlying technology, allowing for the assets to be distributed in an international, digital sphere, and making it hard to pinpoint their territorial location and solve legal issues. This thesis, therefore, aims to clarify the questions of qualification and connecting factors for the choice of law when dealing with disputes concerning crypto-assets under a cross-border contractual agreement. It particularly seeks to examine consumer protection and the predictability of the choice of law in cryptocurrency trading. The thesis concludes that, for some specifically listed contracts, the applicable law is determined through hard and fast rules, but for other more complex contracts, the applicable law is determined by primarily examining the habitual residence of the operator of the characteristic performance, and secondarily, the closest connection. As to consumer contracts, a special rule appoints the law of the country where the consumer has his habitual residence, but only when several requirements are met. The rules pose problems with predictability and finding a territorial connection when the location of the assets or parties cannot be located. It is particularly a problem in decentralized cryptocurrency exchanges. Regarding the qualification, the thesis concludes that the current rules and statements do not provide a definite answer to the characterization of crypto-assets and require technically complex interpretations. Crypto-assets are mainly categorized based on their purpose, and the parties’ expectations. Therefore, fictional objectification of cryptocurrencies as movable property is possible when accepted as such by the parties. Moreover, cryptocurrency trading does not fall within traditional financial regulations but can be categorized as a service where the coins constitute

The overarching purpose of the thesis is to explore how institutional demands influence banks, which has been a core issue in banking research. This has become even more critical since the financial crisis of 2007–2009. By conducting a qualitative study and paying attention to the exchange of different forms of hard and soft accounting information, the thesis expands the current knowledge on how institutional demands influence highly regulated organisations, such as banks, which can face sanctions if they are not compliant when potential regulations enter into force. The thesis contributes to literature on institutional demands, as the thesis shows that even financial regulatory initiatives influence banks. Accordingly, the potential regulations can create tensions between banks and regulators. Here, the increased dependency on information technology (IT), which must be developed, is central. This is demonstrated by studying regulations and the formation of regulatory initiatives, including MiFID II, KRITA and financial robo-advising. The thesis includes four individual studies and puts them in a larger context, and it relates them to each other to increase our knowledge. Study I, which contributes to knowledge on how exchanges between firms and banks take place. It demonstrates that the exchange is more complex than previous literature suggests, and that the exchange differs depending on what financial services are considered. Studies II–IV then add knowledge on how institutional demands, manifested by regulations and regulatory initiatives, influence banks. These studies also reflect on the importance of qualitative information when adopting new financial regulations and when regulating certain bank services, primarily those services that rely on softer forms of accounting information. Specifically, Study IV demonstrates how financial robo-advising comes into being and influences financial intermediaries, including FinTech companies, such as modern banks, by focus

This dissertation focuses on exogenous regulatory changes, which allow us to provide quantitative causal evidence on the impact of pre-and post-trade transparency and alternative order books on market quality. First, we study how increasing informational asymmetry due to declining broker ID disclosure affects market liquidity for individual and institutional investors and their trading behaviour at the trading level and on an order level, respectively. We investigate three unique policy changes regarding broker ID disclosure conducted on the Helsinki stock market. We find that transaction costs overall improve with an enhanced level of information disclosure. The reintroduction of ex-post broker identities improved transaction costs by over 36.8bps at market level and 15.6bps for buyer-initiated orders. Overall market volume declined by 0.1% when ex-post broker identities were removed and increased by 0.02% when ex-post identities were reintroduced. Second, we explore how trading via systematic internaliser (SI), investment firms dealing on their own account outside a regulated market and are a counterparty, not a trading venue, relates to overall market quality. We are the first to provide quantitative causal results, showing that on an aggregate level, SI trading, driven by limit-order SI trading, seems to improve market quality by enhancing competition in the limit order book. Limit-order SI trading lowers transaction costs significantly. Autocorrelation and variance-ratio improve at a highly significant level. The findings are essential to evaluate SI trading on a quantitative basis, allowing regulators to evaluate decisions and provide a foundation for future discussions on internalised trading. Last, we examine the level of informed trading in SI and periodic call auction trading and how it drives price discovery on the lit trading venues. Both forms of trading offer less pre-trade transparency than the central-limit-order book but are much more transparent th

Het grootste gedeelte van de Nederlandse crowdlendingmarkt, en daarmee ook het grootste gedeelte van de Nederlandse crowdfundingmarkt, wordt vanaf 10 november 2021 gereguleerd door de Europese Crowdfundingverordening (hierna: 'ECSPR'). In dit artikel gaat de auteur niet alleen in op de vraag of de ECSPR een MiFID II-light regime voor zakelijke crowdlending inhoudt, dus een zwaarder regime dan het huidige regime op grond van de Wft, maar ook op de vraag of verzwaring van de regulering van zakelijke crowdlending wenselijk is.

This dissertation examines how changes to the information landscape affect the quality of information reported by companies, its dissemination in capital markets, and investors’ processing of the information. In particular, I investigate experimentally how public scrutiny of companies, changes to the structure of transaction fees, and the framing of company disclosure affect capital market communications.

This chapter examines how the principle of good administration can be used as an accountability tool within the composite administrative structure of EU financial market law. Composite administrative procedures are not new in EU secondary law, and are well known in the case law of the Court of Justice of the European Union (ECJ). But financial market law differs from traditional composite administrative procedures in that it does not merely link decision-making, but also aspires to establish a common supervisory culture. Supervision in its entirety, here, is shared between EU and member state bodies, both in regards to factual administration, and decision-making procedure in individual cases, where different parts of the administrative decision-making procedure are taking place within different jurisdictions, European and national. Since the financial crisis at the end of the first decade of this millennium, a coherent and efficient supervision of the integrated European financial market has, in itself, been identified as an overriding aim. However, even though administrative cooperation and composite procedure are regulated in MiFID II and MiFIR, central components of the principle of good administration—for example the duty to care and the right to be heard—are not addressed in these acts.

The role of the financial advisor is subject to fiduciary duty, which means that the advisor always should act in the best interest of the client and has traditionally referred to the financial aspects. Finance is now experiencing a revolution, where the concept of sustainable finance is on the agenda of many actors when the sustainability amendments to MiFID II entered into force, as part of the EU Action Plan on Sustainable Finance. The new regulations will add to the already intensified information load characterizing the financial advisory landscape. Moreover, this new dimension of sustainability is very different from the strictly financial one, which in itself is subject to both conceptually and operational complexity. This study aims to investigate what difficulties and complexities are arising from the growing amount of sustainability demands and information and how these affect the financial advisor and its role. This was done as a qualitative case study where nine semi-structured interviews were conducted with financial advisors working in Denmark, Finland, and Sweden, together with two interviews with employees working with sustainability at a central level in a Nordic bank. The analysis is based on the interviews combined with current literature and together lays the foundation for the findings. The key findings of the study are that there are five identified difficulties stemming from different areas that are seen as important for understanding what the inclusion of sustainability preferences into financial advisory might mean going forward, and what effects that it will have on the financial advisor: (i) regulatory changes and compliance, (ii) sustainability preferences, (iii) the information-intensive landscape, (iv) advisors’ required awareness and knowledge, and (v) the perceived advisor’s role. When adding these identified difficulties together, the conclusion is that the concept of sustainable finance is not as uncomplicated as perhaps portrayed, Den finansiella rådgivarens roll är föremål för fiduciary duty, vilket innebär att rådgivaren alltid ska agera i kundens bästa och traditionellt har hänvisat till de ekonomiska aspekterna. Finans upplever nu en revolution, där begreppet hållbar ekonomi står på dagordningen för många aktörer när hållbarhetsändringarna till MiFID II trädde i kraft, som en del av EU: s handlingsplan för finansiering av hållbar tillväxt. De nya reglerna kommer att öka den redan intensifierade informationsbelastningen som kännetecknar det finansiella rådgivande landskapet. Dessutom skiljer sig denna nya hållbarhetsdimension mycket från den strikt ekonomiska, som i sig är föremål för både konceptuell och operativ komplexitet. Studien syftar till att undersöka vilka svårigheter och komplexiteter som uppstår till följd av den ökande mängden hållbarhetskrav och information och hur dessa påverkar den finansiella rådgivaren och dess roll. Detta gjordes som en kvalitativ fallstudie där nio semistrukturerade intervjuer genomfördes med finansiella rådgivare som arbetade i Danmark, Finland och Sverige, tillsammans med två intervjuer med anställda som arbetade med hållbarhet på en central nivå i en nordisk bank. Analysen baseras på intervjuerna i kombination med aktuell litteratur och lägger tillsammans grunden för resultaten. De viktigaste resultaten i studien är att det finns fem identifierade svårigheter som härrör från olika områden som ses som viktiga för att förstå vad införandet av hållbarhetspreferenser i finansiell rådgivning kan innebära framöver och vilka effekter det kommer att få för finansiella rådgivare: (i) regeländringar och efterlevnad, (ii) hållbarhetspreferenser, (iii) det informationsintensiva landskapet, (iv) rådgivarnas medvetenhet och kunskap och (v) den upplevda rådgivarens roll. När man sammanställer dessa identifierade svårigheter är slutsatsen att begreppet hållbar ekonomi inte är så okomplicerat som det kanske framställs, och detta gäller extra för den studerade inklude

The landscape of equity trading changed when computer algorithms commenced to analyse large volumes of stock market data faster than a fraction of a second. Advances in technology have enabled trading algorithms to initiate, route, and execute orders on aspects of market timing, optimising order quantity, and deciding price parameters with limited human intervention. The distinctive features of high-frequency trading are low latency, high order to trade ratio, co-location, and short holding periods. Besides contributing to profitability, cost efficiency, and competitiveness, it has also amplified issues such as systemic risk and market disruption. European legal frameworks – in particular the Markets in Financial Instruments Directive II (MiFID II) and the Market Abuse Regulation (MAR) – have been and still are a response to this fairly new proprietary trading paradigm. This thesis interprets and analyses the risk mitigation and market manipulation requirements in order to clarify whether the legislation regarding high-frequency trading is compliant with the underlying appropriateness of MiFID II, MAR, and the Swedish Securities Act. The following two chapters provide an overview of the capital market with its participating actors and an outline of requirements for high-frequency trading investment firms. The ban on market manipulation is thereafter examined, systemised, and exemplified vis-à-vis fictitious transactions through manipulative schemes. Lastly, a case law analysis is conducted in respect of market abuse and defective trading algorithms. This thesis finds plausible causation between defective trading algorithms, investor confidence, and market manipulation. Nevertheless, high-frequency trading per se is not considered to meet the necessary prerequisites for market manipulation stated in MAR. Information provision is one of the foremost tools to mitigate risk linked to systemic events and disruptive markets. However, too extensive requirements can pote

Nella prima metà del 2021, le azioni di numerose società quotate hanno registrato un andamento anomalo comparabile con l’oscillazione dei titoli che ha caratterizzato il caso GameStop. In queste fattispecie, un ruolo centrale è stato svolto dalle piattaforme di trading online e dalle community su internet, che: (1) facilitano l’accesso ai mercati finanziari, comportando per gli investitori una significativa riduzione nei costi di transazione e di coordinamento, ma, nel contempo, (2) sono foriere di nuovi rischi, favorendo eccessi di confidenza e comportamenti gregari. In tale contesto, è, pertanto, ragionevole ripensare la disciplina dei servizi di investimento esecutivi, tipicamente prestati dalle piattaforme di trading online. Nella prospettiva della tutela dell’investitore e dell’efficiente funzionamento dei mercati, dopo aver presentato e discusso le indicazioni dell’ESMA, il presente lavoro propone due soluzioni ulteriori: una modifica del regime di mera esecuzione e appropriatezza, mediante l’introduzione di un periodo di “riflessione”, e un rafforzamento della disciplina di product governance., Since the case of GameStop, in the first half of 2021 many listed companies registered anomalous trends of their shares. In these events, online trading platforms and internet communities have played a central role. Both facilitate access to financial markets and enable investors to reduce transaction and coordination costs. At the same time, these technological innovations favour investor overconfidence and herd effect. Therefore, it is reasonable to rethink the discipline of EU executive investment service, typically provided by the online trading platforms. From the perspective of increasing investors protection and the efficient functioning of the markets, after having presented and discussed the solutions proposed by ESMA, this paper proposes two further solutions: a cooling-off period in the execution only and appropriateness regime and an increase in the product governance discipline.

Diese Arbeit umfasst drei unabhängige Aufsätze, welche die Auswirkungen verschiedener regulatorischer Maßnahmen auf das Bankenrisiko und/oder die Finanzstabilität untersuchen. Zunächst wird der Einfluss von Eigenkapitalanforderungen auf den Zusammenhang zwischen Bankgröße und Volatilität analysiert. Unsere Panel-Datenanalyse zeigt, dass strengere Eigenkapitalanforderungen den Nexus zwischen Größe und Volatilität schwächt. Große Banken haben, ceteris paribus, einen weniger volatilen Kreditbestand, wenn sie strengerer Kapitalregulierung ausgesetzt sind. Gemäß dem Granularitätskonzept kann dies ebenfalls die makroökonomische Stabilität erhöhen. Als Nächstes untersuche ich, ob MiFID II die frühzeitige Informationsweitergabe über Änderungen von Analystenempfehlungen an einzelne Anleger, genannt Tipping, reduziert hat. Die Ergebnisse zeigen, dass die absoluten Renditen und Handelsvolumina einen Tag vor Veröffentlichung einer Hoch- oder Herabstufung vor und nach Inkrafttreten von MiFID II signifikant ansteigen. Da die Aktienkurse am Veröffentlichungstag weiter steigen bzw. fallen, profitieren ausgewählte Anleger trotz der regulatorischen Änderung weiterhin von einem Informationsvorteil. Dies hat vermutlich negative Auswirkungen auf den Finanzmarkt insgesamt. Zuletzt untersuche ich wie sich die Ausgabe von Contingent Convertible (CoCo) Anleihen, die als regulatorisches zusätzliches Kernkapital (AT1) geltend gemacht werden können, auf das Bankenrisiko auswirkt. Meine Analyse zeigt, dass AT1-CoCo-Anleihen ein bis drei Jahre nach Ausgabe zu einem signifikant höheren Bankenrisiko führen. Übereinstimmend mit theoretischen Studien deutet dies darauf hin, dass CoCo-Anleihen ihr Potenzial zur Stärkung der Eigenkapitalbasis der Banken durch die regulatorischen Anforderungen genommen wurde., This thesis comprises three independent essays evaluating the impact of different regulatory policies on bank risk and/or financial stability. First, we examine the effects of capital regulation on the link between bank size and volatility. Our panel data analysis reveals that more stringent capital regulation weakens the size-volatility nexus. Hence, large banks show, ceteris paribus, lower loan portfolio volatility when facing more stringent capital regulation. According to the granularity concept, that can increase macroeconomic stability. Next, I evaluate if MiFID II reduced the early information disclosure on analyst recommendation changes to selected investors - so-called tipping. I find absolute returns and turnover rise significantly on the day preceding the up- or downgrade release before and after MiFID II became law. Given that stock prices move further in the revision direction on publication day, selected investors continue to profit from an informational advantage, notwithstanding the regulatory change. That is likely harmful to the financial market overall. Lastly, I examine the impact of issuing contingent convertible (CoCo) bonds that qualify as regulatory additional tier 1 (AT1) capital on bank risk. My treatment effects analysis reveals that issuing AT1 CoCo bonds results in significantly higher risk-taking one to three years after the issuance. That is in line with previous theoretical studies suggesting that regulators have stripped CoCo bonds of their potential to strengthen the banks’ capital bases.

Inducement regulation is intended to target the conflict of interests between financial advisors and their clients. Nonetheless, it may also represent a 'public policy device' meant to conform the activity of European distributors with investor protection goals; indeed, by selecting the conditions under which distributors can freely collect inducements, the European regulator simultaneously shapes the market for financial services. Accordingly, 'spot advice' (which poorly performed in the past) is indirectly banned by the quality-enhancement provision set forth in art. 24 MiFID II, and the acknowledged importance of on-going monitoring of the portfolio opens up the collection of inducements linked to the provision of 'periodic advice'. Since this new regime will probably increase the overall costs of investment advice enlarging the 'advice gap', the European regulator tries also to foster the development of FinTech permitting the collection of inducements even outside the strict provision of investment advice. Nevertheless, the concerns regarding investor protection raised by FinTech services (which allow only a mere 'self-assessment' of the investor's profile) suggest a broader interpretation of inducement regulation, with the purpose of enabling investment firms to provide low-cost financial advice capable of effectively encompassing every stage of the investment relationship, from the early assessment of clients' characteristics and objectives to the on-going management of the investments ('simplified advice').

This paper investigates the effects produced by the unbundling of analyst research costs required by MiFID II on market quality, as measured by stock liquidity and price efficiency. We find that the payment of an explicit price for research is associated with a reduction in analyst coverage in the EU. Unexpectedly, the reduction is stronger for large-cap stocks. For mid- and large-cap stocks analyst coverage in the EU is still greater than in the US. The reduction in analyst coverage observed in the EU is part of a downward trend that initiated prior to MiFID II and contributes to close the gap between the two regions. We also find no change in the bid-ask spread for small-, mid- and large-cap stocks, and a slight increase for micro-cap stocks. We observe no significant change in price efficiency. Taken together our findings seem to suggest that there was an overproduction of research in Europe with the previous regulatory regime. However, the growth of passive management and index funds may also explain the observed decrease in coverage.