International Law and Practice of Securities Markets

LAWS72021 International Law and Practice of Securities Markets 30 Semester 1 Postgraduate Taught Level 7 Vincenzo Bavoso Unit coordinator 1 FHEQ level (Framework for Higher Education Qualifications) ' Undefined ' European Credit Transfer & Accumulation System Rating : 15.0 The financial industry as it appears today is the result of a process of transformation that has taken place over the past thirty years. It started with the liberalisation of capital flows that took place progressively since the mid-1970's, due to the end of the Bretton Woods agreement, and was then followed by the deregulation of the financial services sector between the 1980s and the late 1990s. Deregulatory policies were initially enacted in the UK and US where favourable governments gave pace to reforms aimed at enabling the further growth and development of capital markets. Similar policies were at the same time strongly advocated by transnational regulatory networks, such as the IMF and the World Bank, which effectively had the effect of promoting the same ideologies and policies at a global level (sometimes referred to as the Washington Consensus). The modern financial landscape is of course also the offspring of a technological revolution, which allows today practices such as "high-frequency trading" or "dark pools". More simply, without advancements in IT, even simple trading practices would not be possible today and the volume of business in financial markets would be substantially reduced (think about how trading took place in the "old days" and compare that with contemporary trading floors; you just need to browse the net or watch some 1980s movies and then compare them with some of the more recent ones). The first manifestation of the new financial world was probably represented by the huge increase in bond issues in the 1980s, which was followed by the surge of "junk bonds". These among other things contributed to fund a wave of hostile takeovers that characterised US (and later to a smaller degree UK) financial markets. It is important to remember that most of these mergers and acquisitions were heavily funded with debt- the so called leveraged buyouts (LBOs). The 1980s also saw a steep increase in the volume of derivatives trading. This stemmed from the initial liberalisation of derivatives, which moved away from the traditional agricultural markets. From commercial products designed to hedge risks, derivatives started to be employed with reference to a much wider range of underlying assets, becoming at the end purely financial products, reflecting in other words the value of other financial products. By the end of the last century, the last differentiation between commercial and speculative derivatives was finally eroded (with the CFM Act in 2000) and this gave way to the mass application of speculative transactions that started to evolve and be combined with other commercial transactions. Another interesting result of this process of transformation is the emergence of the relatively new channels of finance and in particular of new and innovated transactions. Disintermediation from banks as a source of finance started to be increasingly pursued both by corporations and by other financial institutions. This trend became particularly important in the banking sector too, because banks started funding their business through wholesale channels of finance (in essence activities in the capital markets with other financial institutions), rather than through the more traditional retail funding sources consisting in deposits. Moreover, the growth of the housing market, both in the US and the UK, spurred banks to look for ways to liberate more capital in order to be able to generate increasing volumes of mortgages. What is known as asset backed securitisation started to be employed on a massive, industrial scale and it resulted in what has been referred to as the process of "originate and distribute". Throughout the years, ever more complex and opaque forms of securitisations were engineered by banks, in particular investment banks, which transformed the relatively simple structure of securitisation into products such as collateralised debt obligations and credit default swaps. <div> In the years before the global financial crisis of 2007-08, the growth of capital markets, and in particular of debt capital markets finance. It is designed to provide students with a detailed and contextual understanding of this very complex  and extremely central area of finance. </div><div>  </div><div> The module is delivered through 26 hours of lectures and 4 hours of seminars. Most lectures are conducted in an interactive way and students are highly encouraged to engage with the relevant discussions. Seminar attendance is an essential preparation for the various assessments. Students are required to prepare the seminar questions by reading the relevant material in advance of the seminar session. </div>Students wanting to write a dissertation or research paper in one of the topics related to this course will be provided with a list of possible titles. Alternatively, students can also present proposals for titles to be approved by the module's instructor.  To introduce students to the international aspects of securities law and practice highlighting:1) the main functions of capital markets2) different financing systems and techniques and3) transactional and regulatory issues/development Upon successful completion of the module, students will gain awareness and critical understanding of:1) the main theories and functions of financial markets2) the law and practice of international securities markets, particularly the distinction between bank and finance and capital market finance;3) the genesis of the global financial crisis from the lens of capital market finance4) the current developments in securities markets, mainly in the UK and US 30 hours of lectures and 4 seminars 2 Written assignment (inc essay) 100% . Y There is no textbook for this module. Every lecture block will be accompanied by a handout which will refer to a reading list. This will mostly comprise journal articles, reports and other scholarly references. Below is a list of some preliminary resources, which you are by no means expected to read before the beginning of the module! Preparation for seminars however will need to be grounded on your understanding of the lecture material, which will have to be necessarily supplemented by the reading of the material indicated at the end of each lecture handout. Warning: the slides alone are very far from being sufficient!Here is a taste of some relevant sources: V. Bavoso “Debt Capital Markets: Law, Regulation and Policy”, OUP, 2024;E. Avgouleas, "Governance of Global Financial Markets: The Law, the Economics, the Politics, CUP 2012;P. Wood "The Law and Practice of International Finance", Sweet and Maxwell 2008;V. Bavoso, Explaining Financial Scandals, CSP 2013;De Haan, Oosterloo, Schoenmaker "Financial Markets and Institutions", CUP 2012;Valdez and Molyneux "Global Financial Markets", Palgrave 2013     0 0 0