The recent news

June 24, 2016

Breaking news

The Autorité des Marchés Financiers (AMF- French Prudential Supervision Authority) set up a Scientific Advisory Board under the supervision of its president Gérard Rameix, who is also president of the AMF.

The Scientific Advisory Board chose ‘Financial education in the digital era’ as the theme of its annual conference, which was held on 20 June 2016 in partnership with Paris School of Economics.

The conference was opened by François Villeroy de Galhau, Governor of the Banque de France (France’s central bank). He stated that financial literacy “shall help everyone make informed decisions”. In this regard, financial literacy is a “factor for economic efficiency and social fairness”, which justifies involvement from public authorities- including, namely, the Banque de France. In partnership with both the Autorité de Contrôle Prudentiel et de Résolution (ACPR- French Prudential Supervision Authority) and the AMF, the Banque de France ought to be a “caring educator, but an attentive regulator”, as it is “imperative that financial literacy and Regulation should be taken forward jointly, as to allow for new technologies to develop, which would be understood by all and for the benefit of all”.

Three roundtables followed. The first roundtable aimed at assessing financial literacy trends and their impact on the financial behaviour of consumers and investors in Europe. The second session focused on the opportunities opened up by new technologies (upon which Fintechs, e.g., crowdfunding platforms, data aggregators and automated financial advice services are thriving) as regards financial behaviours. Lastly, the third panel discussion, which involved several French (AMF, Institut National de la Consommation- INC, French National Institute for Consumer Affairs) and European (European Commission) Regulators, draw conclusions from the first two roundtables and discussed on the issues that an increasingly digitalised financial education raises for Regulatory authorities.

Since this conference raises many crucial questions for Regulation, it is important to recall what has been said in the panel discussion on the role of Regulator with regards to financial education (I.) before sharing some thoughts on this matter of particular interest (II.). 

June 22, 2016

Breaking news

It is sometimes argued that the competitive freedom will destroy the "old regulated world", platforms being the perfect example of this fresh wind, the invention of the adjective "disruptive" which could express a "novelty" before which it is only suitable to bow.

It would be therefore necessary to smile or even laugh, what would be a "rearguard battle" when the Conseil Constitutionnel (French Constitutional Council) in a decision of 22 May 2014 had limited the expansion of Uber, protecting the correspondingly monopoly holders of a municipal taxi license.

But in the US, cities adopt regulations. So on the next city council of the city of Chicago, will be proposed the vote of an order to compel the rideshare drivers.

In 2014, the French Constitutional Council justified its decision by referring to "the public order of parking", which the municipality is mistress... The justification given here is to protect the occupant.

Indeed all rideshare drivers will be obliged provide proof that they are subject to health checks, especially on drugs and provide criminel check also.
This is justified because Regulation of an activity implies control of those who exercise it and equal competitors can justify that for the same activity some are removed, especialy  in view of the protection of the person transported.

The third new requirement is of a different nature: the driver must prove that it is not in debt to the municipality. Why not, since the infrastructure of the city allows them to exercise the economic activity in question. This is another underlying objective, which lies rather in the idea of an exchange between the city and the one who transports people, the beneficiary of infrastructure should not be otherwise debtor that it enjoys public infrastructure.
The latter provision shows that the "contract" is increasingly not between the carrier and transported - via the virtual platform - but between the very concrete public space and one that circulates and do not live there.

 

June 21, 2016

Breaking news

On 17 June 2016 the prosecutor (Avocat général près la Cour d'appel)  presented its closing arguments (réquisitoire) before the judges of the Court of Appeal of Versailles, in the Kerviel case.
 
On the merits, the prosecution asked the condemnation of the trader for criminal offenses he has committed but asked that the bank, which is presented as a victim of its trader should be dismissed from all its claims against the author.

June 20, 2016

Breaking news

Little is known about how to ‘regulate the Internet’…

Outline solutions, however, do seem to have to be found in ex-post mechanisms since Regulation (broadly speaking) understand ex-ante and ex-post mechanisms as a continuum, and since Regulators increasingly concentrate ex-post mechanisms in their hands as an effective way to ensure execution of the ex-ante prescriptions they themselves elaborated.

Ex-ante mechanisms aim at making algorithms more ‘loyal’.

As long as we hope for devices to be trustworthy and to be held accountable for their ‘loyalty’, we give merits to the idea that we probably should “take liability seriously”.                                                                                                                       

On June 14, 2016, the Californian father of one of the victims of the 11/13/2015 Paris attacks filed a suit in a U.S. District Court to prosecute Google, Facebook and Twitter

The legal dispute is clear.

The applicant based its claim to hold the companies liable on the grounds that they let terrorist groups use their networks: “The suit claims the companies “knowingly permitted” the Islamic State group, referred to in the complaint as “ISIS”, to recruit members, raise money and spread “extremist propaganda” via their social-media services”.

Conversely, the defendants unanimously claimed that they had actively implemented ‘policies’ against extremist material, and that they were working with law enforcement entities to improve regulations on the matter. Self-regulation and ethics versus common liability law.

The companies also pointed out the fact that they were not publishers, hence they could not face liability for the material users post on their networks. This is not, however, the issue at stake: the complaint concerns the use of the network not as a mere way to broadcast messages, but as a way to recruit murderers, provide them with convenient tools to communicate and to prepare criminal operations—allegations for which law does not exempt social media companies from liability.

These allegations are worth being ‘taken seriously’, should the law be unclear on whether the companies could be charged indeed, and should the total exemption from liability of such companies pleading for their ‘neutrality’ be the exception rather than the norm.

The question of principle is thus as follows: is exemption from liability of those who hold the ‘digital space’ together really the norm?

If so, their exemption from liability needs to be extended to a scenario that had not been covered by the law yet. If not, then common liability law is the rightful legal basis to assess whether the companies can be found liable or not—provided that a direct causal link between the unlawful act and an actual harm suffered by the applicant can be demonstrated.

 

 

The legal dispute is clear.

 

June 16, 2016

Breaking news

Professor Hervé Causse released a book of over 800 pages: Droit bancaire et financier (Banking and Financial Law).

Typically, there are "Banking Law" on one side and "Financial Law" on the other, each giving rise to separate books, Banking Law having long since detached from the Commercial Law and do having never really left Civil Law, Financial Law being more subject  recently of books.

Typically, there are the "Banking Law" on one side and the "Financial Law" on the other, each giving rise to separate books, banking, having long since detached from the Commercial Law and do having never really left the Civil Law, financial law being more subject  recently of books.


In the books of "Banking Law", we find the contracts, transactions (credit), mechanisms (like money), institutions (such as the National Central Bank) and sometimes specific repressive rules.
In the books of "financial law", first of all, we meet financial market, financial transactions (like all securities transactions or takeovers bids), the economy is much more present, the US Law being at home because of extraterritoriality as either model, repressive rules slipping everywhere, to the heart of what appears to be today a branch of law.

The important work of Hervé Causse goes further and corresponds to reality: it merges the Banking and Financial Law.

He does it because his work is based on the life of the sector, that is to say the professionals. In fact, professionals work in banks. Then he describes those who admit and control their activities, that is to say the authorities of supervision and regulation. He goes on to describe to the reader the instruments, financial prowess that the bankers invent.

Thus sucked by financial reality, what is left of the civil commitment of Banking Law? To take just one example, when the author discusses the concept of "banking service" from that of "financial service", he finds the uncertainty of this notions. The Banking Law is thus trying to forget the Civil Code, the “deposition” techniques being one example.

Thanks to the book of Hervé Causse, the reader understands that the rules now being written by those designing financial regulation, these rules must find their bones in the financial regulatory system.

June 15, 2016

Releases : I. Isolated Articles

June 14, 2016

Breaking news

On 9 June, the SEC made an announcement on its website.

  • The Regulator itself issued the amount of the award to a whistleblower for having providing it with information. Why is that? One would usually take a lower profile when awarding this much money ($17m) to an informer… Conversely, the Regulator immediately and publicly announced it in a press release, which pretty looked like a tender offer for further denunciations. It even included a link for everyone to access the whistleblower program—which is easily funded, since the awards are charged on the fines imposed on the convicted operators thanks to the information given.

 

  • The reason for this is that information from whistleblowers is not merely indicative, nor a second-best option; it is central to Regulation, since it leads the Regulator to get information people within the system (i.e., insiders) deliberately chooses to ‘blow’ (in fact, not only do informers blow the whistle—they often immediately provide the Regulator with substantial information).

 

  • The press release includes justifications for the Regulator’s behaviour, as the SEC openly considers that rewarding whistleblowers is the most efficient way for the Regulator to open or to resolve investigations. The Director of the SEC’s Division of Enforcement stated indeed that “company insiders are uniquely positioned to protect investors and blow the whistle on a company’s wrongdoing by providing key information to the SEC so we can investigate the full extent of the violations”.

 

  • This highlights the ambivalence of insiders. Accordingly, they need to be ‘inside’ the system to be ‘knowledgeable’ and, consequently, obtain privileged information. On the one hand, should they use this information for themselves, then they would face prosecution for market abuse; on the other hand, however, if they use it to stir up the Regulator and shift its attention towards the whistle they’re blowing, then they may earn just as much money, if not more, than if they had behaved in a way that would have led them to prison.

 

The stage is thus set for the "business of virtue" to thrive.

 

 

 

Jan. 21, 2016

Articles