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Über dieses Buch

This book analyzes the legal system for the protection of retail investors under the European Union law of investment services. It identifies the regulatory leitmotiv driving the EU lawmaker and ascertains whether and to what extent such a system is self-sufficient, using a set of EU-made and EU-enforced rules that is essentially different and autonomous from the domestic legal orders. In this regard, the book takes a double perspective: comparative and intra-firm. Given the federal dimension of the US legal system and, thus, the “role-model” it plays vis-à-vis the EU, the book compares the two systems. To fully highlight the existing gaps and measure how self-sufficient the EU system is against its American counterpart, the Union/Federal level as such is analyzed – i.e., detached from the national (in EU terms) and State (in US terms) level. Regulating Investor Protection under EU Law also showcases the unique intra-firm perspective from a European investment firm and analyzes how EU-produced public-law rules become a set of compliance requirements for investment services providers. This “within-the-firm” angle gauges the self-sufficiency of the EU system of retail investor protection from the standpoint of an EU-regulated entity. The book is intended for both compliance professionals and academic scholars interested in this topic while also including illustrative sections intended to provide a broader regulatory view for less-experienced readers.

Inhaltsverzeichnis

Frontmatter

1. Introduction

Abstract
The book revolves around the legal protection of retail investors under the European Union law. Although it originally stems from the “on-the-books” studies of the author, it has been enhanced by his subsequent “in-action” professional experience as Compliance Professional in the European banking and financial industry. For this reason, the book is intended for both Compliance Professionals and academic scholars interested in this topic, and the language and jargon employed are meant to adapt to both audiences.
Antonio Marcacci

2. Toward a European Regulatory Investor Protection Law

Abstract
The book opens by drawing up the boundaries of its normative scope. This chapter starts by briefly explaining the key differences of the two traditional patterns of financial systems and the gradual shift—from bank based toward market based—which has been occurring in Europe over the last decades. It, then, gives an account of the European Regulatory Private Law (ERPL) theory and embeds the EU law of investor protection into the margins of such theory. The overall message is the claim that the EU law of investor protection is actually a “European Regulatory Investor Protection Law”.
Antonio Marcacci

The Law-on-the-Books

Frontmatter

3. The Evolution of the EU Law of Financial Markets

Abstract
This chapter provides a descriptive breakdown and an evolutionary analysis of the European statutes dealing with financial services. It highlights the regulatory leitmotiv driving investor protection in the EU law of financial services and the related introduction of specific—increasingly detailing—public-law rules. Although the disclosure paradigm based on the rational-investor model was largely used since the 1980s, the regulatory approach has become increasingly sensitive toward less-rational retail investors and has required firms to proceduralize investor protection tools previously handled mostly through contracts. The chapter flags—by giving concrete examples—how detailed the set of EU-made regulatory requirements (intra-firm proceduralization of conduct-of-business duties) has become with the result of making the Compliance Function a central figure in modern investment firms.
Antonio Marcacci

4. The Relationship Between an Investment Service Provider and a Retail Investor: EU and the United States Compared

Abstract
This chapter compares the single features of the client-service provider relationship under the EU and US laws in order to test to what extent the two systems share similar patterns and verify whether and to what extent the US blueprint may be reproducible in Europe. The result of the comparison highlights the structural difference between the two systems. Whereas the United States rests on a complexly knitted structure of common-law contract law, securities statutes, and self-regulatory organizations’ rules, the EU arrangements for investor protection heavily rely on public-law duties.
Antonio Marcacci

The Law-in-Action

Frontmatter

5. Public Enforcement

Abstract
This chapter covers public regulators and their regulatory and enforcement powers. The agencies taken under examination are the European Securities and Markets Authority (ESMA) and the Securities and Exchange Commission (SEC). The differences between the two authorities are clear. Whereas the SEC is endowed with full-fledged regulatory and enforcement powers, the ESMA is still far from such completeness. However, the European Authority has been gaining more and more powers since its inception in 2010. This is true for both regulatory production—as clearly proved by the quantity and quality of delegation under MiFID II—and enforcement activity—as it is shown by the emergency product intervention powers granted under MiFIR.
Antonio Marcacci

6. Private Enforcement

Abstract
This chapter describes private enforcement mechanisms in both jurisdictions. In the United States, private enforcement mechanisms at the federal level are full fledged through collective mechanisms and arbitration procedures. Nothing like this exists in the EU, where private enforcement mechanisms are firmly in the hands of the Member States. The only private enforcement tool the EU has recently pushed to protect investors concerns Alternative Dispute Resolution mechanisms, harmonized at the European level.
Antonio Marcacci

7. The Compliance Function as Embedder of the Law-on-the-books and as Enforcement-Frontliner

Abstract
This chapter concerns the Compliance Function and its activity as law-embedder and internal enforcer. The aim is to give the reader an account of how the “law-in-action within a firm” unfolds (in addition to the examples Chap. 3 provides). Since its establishment, the Function has been gaining importance vis-à-vis the traditional Legal department, which is a mark of the public-law nature of EU law. Importantly, when the EU investor protection law is viewed through the lens of a European investment firm, its degree of self-sufficiency looks far less incomplete than the vision gained from the formal comparison with the United States. The EU-produced norms, indeed, automatically become compliance requirements that regulated entities must fulfill under the rule-embedding and monitoring of the Compliance Function.
Antonio Marcacci

8. Conclusions: The Unbridgeable Gaps with the United States and the Emergence of an Increasingly Self-Sufficient EU Regulatory Investor Protection Law

Abstract
On the one hand, EU law dims the US-inspired disclosure paradigm in favor of a paternalistic approach, shifting most of the investment responsibility onto the service providers’ shoulders. Nevertheless, the US system is still a blueprint, and the comparison shows how the US private-public enforcement interplay is not reproducible in Europe. The EU investor protection system seems irreparably incomplete. On the other hand, however, EU law now provides for a full set of public-law conduct-of-business rules, used as supervisory tool and whose level of details makes it directly applicable to firms. Such EU-made rules automatically become requirements for firms, with the Compliance Function behaving as rule-embedder and internal enforcer. Viewed from within-a-firm, the EU investor protection system increasingly resembles a self-sufficient Regulatory Investor Protection Law.
Antonio Marcacci

Backmatter

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