Emissions trading in the European Union

The first 150 words of the full text of this article appear below. Key points

• The EU ETS will undergo a number of changes consequentupon the commencement of the first Kyoto Commitment Period on1 January 2008.
• This article considers the existing EU ETSframework and also the key developments that are anticipatedin the European emissions market for 2008–2012.
• A secondarymarket for trading EUAs has already developed and this market,together with the standard-form documentation used, is discussed.
• Inconclusion, the article questions the future of emissions tradingin Europe—particularly after the current Kyoto targetsexpire in 2012.

  European businesses entered a carbon-constrained economic environmenton 1 January 2005. For some, the impacts were immediate anddirect in the form of caps on their emissions. The majorityfelt it indirectly and more slowly through increased energycosts as the perceived cost of compliance was passed on by generators.The full impacts are not yet clear, but a quiet revolution is. . . [Full Text of this Article]

Complex financial histories--a problem solved?

The first 150 words of the full text of this article appear below. Key points

• Recognizing the importance of ensuring that the financialhistory presented in a prospectus appropriately reflects thesubstance of an issuer's operations, the European Commissionhas brought forward an amendment to the Prospectus Directiveimplementing Regulation (809/2004) which will take effect fromJanuary 2007. The new law defines two new terms, namely a ‘complexfinancial history’ and a ‘significant financialcommitment’, which if applicable will require an issuerto consider including additional historical financial informationto that of its own.
• Following the Committee of European SecuritiesRegulators' advice on this subject, as well as the views ofmarket participants, the new law does not prescribe the financialreporting solutions to be followed. Rather, it sets out theprinciples to be applied and then allows competent authoritiesflexibility to accommodate solutions that reflect the particularcircumstances of an issuer. Notably, the competent authoritiesare required to take into account the . . . [Full Text of this Article]

 

How to compare regulatory regimes

The first 150 words of the full text of this article appear below.

It is the policy of this Journal to only publish material thathas not been published previously. However, an exception hasbeen made with this article as the work from which it has beendrawn has only recently published. This article is taken fromPhilip Wood's Regulation of International Finance, one of aseries of nine works by Philip Wood on the law of practice ofInternational Finance, published by Sweet & Maxwell in 2007.Philip Wood is a member of the Editorial Board of Capital MarketsLaw Journal. Many readers of Capital Markets Law Journal aroundthe world will not have had the chance to read this very topicalarticle which is of exceptional quality and Capital MarketsLaw Journal is very pleased to make it available to the widercapital markets community.                 TheEditors

Key points

• This article examines the criteria which might usefullybe . . . [Full Text of this Article]

 

Hedge fund regulation, market discipline and the Hedge Fund Working Group

The first 150 words of the full text of this article appear below. Key points

• Against a general background of suspicion, criticismand even hostility, the recently formed Hedge Fund Working Group(HFWG), comprising 14 leading fund managers based mainly inthe United Kingdom, published their Final Report in January2008.
• The Report is based on standards of best practice (the‘Standards’ of which there are 28) that are, inthe final analysis, to be administered by a newly establishedHedge Fund Standards Board (HFSB)—a self-regulatory bodycharged with the responsibility of keeping the Standards up-to-dateand ‘fit for purpose’.
• Borrowing from both theFinancial Services Authority's Principles for Business, whichrepresent bold statements of good business practice within theUK's financial services sector, and the Combined Code on CorporateGovernance's voluntary approach of ‘comply or explain’,the Standards are heralded by the HFWG as ‘an exercisein market discipline, based on disclosure’.
• The unprecedentednature of recent financial market . . . [Full Text of this Article]

 

Which law applies? A reply to Professor Torremans

The first 150 words of the full text of this article appear below.

‘A book may be good for nothing; or there may be onlyone thing in it worth knowing; are we to read it all through?’(Samuel Johnson) This section is dedicated to the review ofideas, articles, books, films and other media. It will includereplies (and rejoinders) to articles, the evaluation of newideas or proposals, and reviews of books and articles both directlyand indirectly related to intellectual property law.

In a recent article,¹ Professor Torremans argues that the countryof origin (sometimes called the lex originis) should be thelaw applied to authorship and ownership of copyright.² There is no doubt that several countries do apply the countryof origin to initial ownership and authorship of copyright works.Citing both the Austrian and Belgian Codes on Private InternationalLaw as examples,³ Professor Torremans also mentions the decisionof the US Second Circuit of Appeals in . . . [Full Text of this Article]

Foreign trading screens in the United States

The first 150 words of the full text of this article appear below. Key points

• Remote trading screens allow investors to trade onexchanges located in other jurisdictions. The Securities andExchange Commission (‘SEC’) has generally prohibitedthe placement of foreign trading screens in the United Statesunless the associated exchange complies with US regulatory requirements.While the SEC defends its position as an essential investorprotection, European officials complain that SEC requirementsconstitute an unfair barrier to trade.
• This article arguesthat technological advances have largely mooted this contro-versy.Current requirements do not protect US investors as much asthe SEC claims nor do they inhibit competition as much as theSEC's critics assert.
• To the extent that alternative tradingmechanisms already give US investors de facto access to unregulatedforeign exchanges, the SEC may well choose to revisit its positionon foreign trading screens, particularly as US and Europeanfinancial markets become more integrated and disclosure requirementson both sides of . . . [Full Text of this Article]

 

Loan only credit default swaps the story so far

The first 150 words of the full text of this article appear below. Key points

• The market for Loan Only Credit Default Swaps (LCDS)is expected to develop rapidly, but the market documentationfor this product is proving to be a difficult issue as a resultof differing views by users of the product and divergent approachesbetween the US and European markets.
• The International Swapsand Derivatives Association, Inc. (ISDA) has, on 4 May 2007,released a long-awaited revised draft of the European LCDS.The finalization of this draft is not far off, but certain importantissues are yet to be finalized.
• Rather than speculate on theoutcome of such discussions, this article looks at the developmentof the European LCDS market, the motivation and needs of itsparticipants and takes stock of the European documentation beforeit underwent the recent almost year-long consultation process.It therefore compares the European LCDS of May 2006 againstthe US LCDS of June 2006 (ignoring . . . [Full Text of this Article]