Clearing and Settlement of Derivatives: Is a Code of Conduct Advisable?

This article is a first step to assess whether a self‐regulatory ‘Code of Conduct’, which has been in effect for European equities, should also be extended to derivatives. The aim of the code is to increase competition and customer choice in the European transaction process (trading, clearing and settlement). The article examines whether such a code is advisable for derivatives by evaluating potential market failures and inefficiencies in European derivatives markets. More specifically, the article: a) highlights the main differences in the clearing and settlement procedures of derivatives versus equities; b) outlines current and alternative market infrastructures in derivatives post‐trade markets; and c) evaluates the current level of competition among derivatives exchanges and also between the on‐ and off‐exchange trading segments. The article concludes that if imminent initiatives taken to increase the competitiveness of over‐the‐counter (OTC) derivatives markets vis‐à‐vis the incumbent derivatives exchanges—such as increased clearing house usage and new entry of multilateral trading facilities—are not effective in the near future, a code of conduct could be envisaged. This should entail promoting faster automation of OTC post‐trade processes and ensuring price comparability is maintained between derivatives exchanges.     

Bounded Discretion in EU Law: A Limited Judicial Paradigm in a Changing EU

Against the background of the reinforcement of the EU executive pursuant to the post‐2008 economic and financial market regulatory reforms, this article deconstructs the prevailing distinction between an executive body's discretion to make policy choices and its discretion when conducting technical assessments. This distinction, which arises out of the current judicial paradigm for discretion, has contributed to the re‐allocation of executive authority within the EU (sanctioned in UK v Parliament and Council and Gauweiler v Deutscher Bundestag). The article traces the distinction's roots in legal conceptions that have shaped legal‐administrative thinking since the early days of the Etat de Droit or Rechstaat. It proposes a public‐interest‐regarding conception of discretion where, in an institutional context where courts’ reviewing role may be limited, discretion's relationship to law is a matter of how legal norms may operate in the spheres of discretion that they attribute to decision‐makers, rather than how courts may review an exercise of discretion.     

'Solange, chapter 3': Constitutional Courts in Central Europe—Democracy—European Union

Abstract: Soon after the accession of eight post‐communist states from Central and Eastern Europe to the EU, the constitutional courts of some of these countries questioned the principle of supremacy of EU law over national constitutional systems, on the basis of their being the guardians of national standards of protection of human rights and of democratic principles. In doing so, they entered into the well‐known pattern of behaviour favoured by a number of constitutional courts of the ‘older Europe’, which is called a ‘Solange story’ for the purposes of this article. But this resistance is ridden with paradoxes, the most important of which is a democracy paradox: while accession to the EU was supposed to be the most stable guarantee for human rights and democracy in post‐communist states, how can the supremacy of EU law be now resisted on these very grounds? It is argued that the sources of these constitutional courts’ adherence to the ‘Solange’ pattern are primarily domestic, and that it is a way of strengthening their position vis‐à‐vis other national political actors, especially at a time when the role and independence of those courts face serious domestic challenges.     

Incomplete Clearinghouse Mandates

In the 2007–08 financial crisis, over‐the‐counter (OTC) derivatives triggered the collapse of colossal financial institutions. In response, global policy makers instituted clearinghouse mandates. As a result, all standardized OTC derivatives must now use clearinghouses, and global financial market stability now depends upon these institutions. Yet certain underlying legal and regulatory structures threaten to undermine clearinghouse stability, particularly were a significant clearinghouse to become distressed. This article argues that the clearinghouse mandates are incomplete in that they fail to reform these problematic arrangements. As with electric utilities, the lights at the financial market infrastructures known as clearinghouses must always be on. Yet the legal frameworks for handling a distressed clearinghouse, the problem of clearinghouse recovery, and resolution, remain uncertain. This article advances debate on this issue. It argues that recovery, a private market restructuring process, can be conceptualized as a bargaining game dependent upon time‐critical cooperation between a clearinghouse and members. This article uses transaction cost economics to demonstrate, however, that certain underlying legal and regulatory structures could work at cross‐purposes to this necessary cooperation, and actually increase its cost. Based upon this analysis, it proposes reforms designed to ensure that parties’ incentives promote efficient recovery. In the absence of efficient recovery frameworks, the path of a distressed, significant clearinghouse is likely to resemble that of the government‐backed mortgage lenders whose fate more than ten years after their entry into conservatorship remains uncertain. This article aims to help avoid a repeat of this history.     

The Making and Unmaking of Feminicidio/Femicidio Laws in Mexico and Nicaragua

This article examines the contested process of law‐making related to the killing of women which resulted in the criminalization of feminicide (feminicidio) and femicide (femicidio) in Mexico and Nicaragua, two countries in which feminists engaged in legal activism to increase state accountability for gendered violence. Through comparative analysis, we demonstrate the importance of (1) the interaction between shifting local political conditions and supranational opportunities and (2) the position of feminist actors vis‐à‐vis the state and its gender regime in shaping regional variation in the making of laws concerning gendered violence. In Mexico, the criminalization of feminicidio resulted from a successful naming and shaming campaign by local feminist actors linked to litigation in various supranational arenas, and the intervention of feminist federal legislators. In Nicaragua, the codification of femicidio resulted from the state's selective responsiveness to feminist demands in a moment of narrow political opportunity within an otherwise highly consolidated regime. We also examine the unmaking of these laws through their perversion in practice (Mexico) and their intentional undermining (Nicaragua) at the hands of the state. Our analysis demonstrates how states' decisions to enact legislation against gendered violence does not occur solely because they are invested in international legitimacy, but also in response to states' shifting acceptance of the legitimacy of supranational authority itself.     

A Review of “Setting the Standard: Certification,Governance, and the Forest Stewardship Council”

Abstract

As the United Nations Convention on the Law of the Sea (UNCLOS) establishes itself as one of the premier regimes in international law, member states are increasingly availing themselves of the significant dispute settlement provisions found in Part XV. The International Tribunal for the Law of the Sea (ITLOS) is beginning to take its place in the pantheon of major international tribunals. Although its jurisprudence thus far has largely consisted of applications for prompt release of vessels, these cases have arisen from disagreements over fishery practices and the enforcement of fishery laws by coastal states. The ITLOS is developing into a transparent, consistent and speedy forum to adjudicate marine disputes arising from UNCLOS. While the overall scope and reach of Part XV may be uncertain at the present time, especially vis‐à‐vis other dispute settlement institutions, the early activity under Part XV is promising. Those concerned with marine wildlife issues should be encouraged by the potential of Part XV, the ITLOS in particular, to serve as an effective regime in the realm of marine wildlife dispute settlement.     

The Governance of Blockchain Financial Networks

Since the emergence of the virtual currency Bitcoin in 2009, a new, Internet‐based way of recording entitlements and enforcing rights has increasingly captured the interest of businesses and governments. The technology is commonly called ‘blockchain’ and is often associated with a closely related phenomenon, the ‘smart contract’. The market is now exploring ways of using these concepts for financial assets, such as securities, fiat money and derivative contracts. This article develops a conceptual framework for the governance of blockchain‐based networks in financial markets. It constructs a vision of how financial regulation and private law should set the boundaries of this new technology in order to protect market participants and societies at large, while at the same time allowing the necessary room for innovation.     

Reexamining the Institutional Effects of Term Limits in U.S. State Legislatures

Research on term limits suggests that they have substantial consequences for the power of legislatures vis‐à‐vis the executive and interest groups and for the relationship between leaders and rank‐and‐file members within a chamber. Existing work, however, has not accounted for the actual power of relevant state actors. We contribute to this research by examining the effect of term limits on the influence of institutional actors conditional on the existing political power structure in a state. The inclusion of controls for the direct and moderating effect of actual institutional power suggests some significant extensions of previous findings regarding the institutional effects of term limits.     

经济全球化背景下金融行政规制的新对策

全球化作为一种客观事实和发展趋势,越来越深刻地影响着世界各国的历史进程,在给人类带来福祉的同时,也将危机带至人们面前.美国次贷危机至今,全球经济仍在波动中缓步前行.这场来势汹涌的经济危机告诉人们,减少政府对经济社会干预为主要经济政策目标的新自由主义经济政策,在金融结构多元化、金融产品创新化的国际金融市场面前显得准备不足.本文旨在研究经济全球化背景下金融行政规制的新对策,使之在防范泡沫性风险的同时能够有助于一国金融体系的持续稳健发展.     

Financial Advice,Differentiated Consumers,and the Regulation of Equity‐release Transactions

In an asset‐based welfare context, which encourages the drawdown of housing equity to meet financial needs in later life, it is anticipated that the use of equity‐release products will become increasingly prevalent. In the last decade, and reflecting the strategic significance and high risk associated with this section of the home finance market, targeted equity‐release products (lifetime mortgages and home reversion plans) have come under the regulatory remit of the Financial Conduct Authority (FCA). The FCA's approach to equity release is geared around professional financial and legal advice. Drawing on findings from a new qualitative study, purposively sampled according to socioeconomic circumstances at the time of the transaction, this article explores the role of financial advice within the factors that shape equity‐release decision making, and considers the implications of the FCA's regulatory commitment to the ‘advice paradigm’ in meeting (or not) the needs of a differentiated consumer population.     

Civil Protection Cooperation in EU Law: Is There Room for Solidarity to Wriggle Past?

This article provides insight into the under‐researched area of civil protection cooperation and disaster response capacity in EU law. It discusses how the mechanisms set up by the EU have assisted Member States in supporting one another when faced with natural or man‐made disasters, including those perpetrated by terrorists. In particular, the article provides a critique of the Article 222 of the Treaty on the Functioning of the European Union (TFEU) clause, which has introduced the principle of solidarity within the EU's security strategy. The author explores the broadened notion of ‘threat’ in Europe and assesses the significance of the Solidarity Clause vis‐à‐vis the level of commitment required by Member States for its coherent implementation. The article then contrasts Article 222 TFEU with the mutual defence clause of Article 42 (7) Treaty on European Union (TEU), and finally points into certain ‘grey areas’ that may have a diminution effect upon the political message concerning the EU as a community based on solidarity.     

The EU–ACP development cooperation – governance challenges for non‐state actors: the case of Malawi

The European Development Consensus 2005 contains a broad policy re‐statement of the EU’s world view vis‐à‐vis its internal and external relations. It places poverty eradication and sustainable development at the heart of its policy. The context within which poverty eradication is pursued is an increasingly globalised and interdependent world that constantly creates new opportunities and challenges. Combating global poverty is seen by both parties not only as a moral obligation; rather as a building block for a more stable, peaceful, prosperous and equitable world, reflecting the interdependency of its richer and poorer countries. The EU has in its relations with the African, Pacific and Caribbean countries, past and present, pursued a development agenda via successive aid and development cooperation arrangements starting with the Yaoundé I convention, through Lomé to the Cotonou Partnership Agreement (CPA). In this article I reflect on the CPA, based on a corpus of shared objectives, principles and the Lomé ‘acquis’ in relation to Malawi non‐state actors (NSAs). I reflect on the opportunities and challenges it presents and how contemplated social dialogue between government and NSAs on the one hand and the EU can translate into poverty reduction, sustainable development and integration of the local economy to the global economy. I conclude that unlike its predecessors, Yaoundé and Lomé conventions, the CPA acknowledges the complementary role of NSAs in the development process, however NSAs in Malawi face constraints in terms of organisation and capacity building that affects their participation. What I do not do is to offer a discussion of the CPA as a whole, for that is outside the scope of this article, but rather have focused on the governance aspect vis‐à‐vis NSAs.     

Constitutional Conflicts,Moral Dilemmas,and Legal Solutions

The article focuses on the definition of constitutional conflicts as moral dilemmas. It discusses the conception of tragic conflicts by which “loss” is a distinctive feature that identifies both moral and constitutional dilemmas. It also asserts the peculiarity of constitutional conflicts vis‐à‐vis moral dilemmas, as well as the possibility of legal solutions to constitutional conflicts.     

A NOT SO HAPPY BIRTHDAY: THE FOSTER YOUTH TRANSITION FROM ADOLESCENCE INTO ADULTHOOD

Every year close to 25,000 youth age out of our foster care system; without the anchor of a family, former foster youth disproportionately join the ranks of the homeless, incarcerated, and unemployed. While the average age of financial independence in America is twenty‐six years of age, we presume that foster youth can somehow attain financial and emotional independence by age eighteen. Instead, these adolescents are woefully unprepared for independent adult life, and when they falter, too often no one is there to provide support or guidance. As a result, former foster youth are ten times more likely to be arrested than youth of the same age, race, and sex and one in four youth who age out of foster care will end up in jail within the first two years after leaving care. This article will discuss strategies for changing these disheartening outcomes for transitioning foster youth, including breaking down our silos and collectively taking charge of the lives of children in our care; keeping a watchful eye on data and outcomes and using that information to guide our actions; ensuring that the voices of youth are an ever‐present part of decisions and processes that will chart their future; and educating ourselves about best practices and new approaches. This article also discusses new opportunities that now exist to support foster youth as they move into adulthood, including new federal legislation that—for the first time—will allow states to support foster youth beyond age eighteen. Finally, this article provides a backdrop for this Special Issue and summarizes the insightful articles and innovative thinking contained herein.     

Reforming the Market or the State? Article 30 and the European Constitution: Economic Freedom and Political Rights

This article takes as its starting-point the relationship between Article 30 of 30 of the EC Treaty (general rule on the free movement of goods) and the European Constitution. On the one hand, it examines Article 30 in the context of the constitutional dilemmas facing the European Union, particularly the balance of powers to be defined between Member States and the Union, between public power and the market, and between the legitimacy of Community law vis à vis that of national law. On the other hand, it reviews different conceptions of the European Economic Constitution by analysing the role of Article 30 in the review of market regulation.     

Entry Bar as Surreptitious Deportation? Zapret na v'ezd in Russian Immigration Law and Practice: A Comparative Perspective

Since 2013, a three‐year entry bar (zapret na v'ezd) has been issued in Russia to migrants with a record of two or more administrative offenses. This article examines the sociolegal characteristics of zapret na v'ezd by situating it in a global, comparative perspective, vis‐à‐vis the legal developments in the areas of deportation and removal in the United States and the United Kingdom. This article argues that the Russian entry bar law experienced a shift, established by other migration‐receiving jurisdictions, from controlling the migration process to controlling the social conduct of migrants, toward an increased reliance on deportability as a form of post‐entry control of the migrant population. At a broader level, I aim to shed more light on the migration governance processes in Russia—the third largest destination of migrants worldwide—by moving away from the intellectually dead‐end explanations that consider Russia as a deviant exception.     

The US financial regulatory reform, causes of financial crisis and its enlightenment on China

Deficiency of the US financial regulation has stimulated the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The fundamental causes of the regulatory deficiency can be categorized as follows: excessively indebted consumption culture in a long term, permanently abolishing the regulation on financial derivatives by the US Commodity Futures Trading Commission, and the regulations before the reform not fitting for the fictitious economy. The operation of financial products is like to fly a kite. The financial product is the kite, governmental adjustment is the string, market regulation is the wind, national culture and legislature and judicature are the environment. Those coordinated elements can guarantee a healthy financial market. To construct an effective financial regulatory system in China, it is needed to make culture with Chinese characteristics, advance the coordinated development of governmental and market regulation, and promote financial legislations and related implementation.     

Challenging EU constitutional law: The Italian Constitutional Court's new stance on direct effect and the preliminary reference procedure

This article seeks to examine the relationship between EU law and the Italian legal order in light of the recent Italian Constitutional Court (ICC)’s jurisprudence attempting to redefine EU core principles. When fundamental rights are at stake, three assumptions are challenged: the determination of direct effect shall be a prerogative of the ECJ; EU directly effective provisions entail the disapplication of conflicting national law; judges have the discretion to refer preliminary references to the ECJ where a clarification on EU law is needed. The contribution argues that the judicial search for a balance between sovereignty and supranationality is undermined by the ICC's new resistance to the well‐established EU jurisprudence. In that respect, the paper posits that the ICC's activism is the result of an unjustified ‘argumentative self‐restraint’ of the ECJ vis‐à‐vis the evolution of EU foundational principles.     

Metamorphosis in Hans Kelsen's Legal Philosophy

Two major questions stem from the fundamental shift in Hans Kelsen's legal philosophy that takes place in 1960 and the years thereafter: first, the scope of the shift and, second, its explanation. On the first question, I argue that the shift is not limited to Kelsen's rejection of the applicability of logic to legal norms. Rather, it reaches to his rejection of the entire Kantian edifice of his earlier work. On the second question, I argue that the explanation for the shift has a conceptual dimension as well as a historico‐biographical dimension. That is, I argue that Kelsen's rejection of the principle of non‐contradiction vis‐à‐vis legal norms reaches to the Kantian edifice in that the principle was presupposed in Kelsen's earlier work and appears, expressis verbis, in his ‘Kantian filter’. And I argue that certain historico‐biographical data are germane, including, quite possibly, the earlier revolution in Kelsen's thought, that of 1939–40.     

The policy origins of the European economic constitution

This article traces the origins of the European economic constitution in the debate on Article 30 of the EC Treaty (general rule on the free movement of goods) between 1966 and 1969, which resulted in Directive 70/50. In this, the first archive‐based analysis of the policy origins of the Court's Dassonville (1974) decision, the article demonstrates that there was a strong continuity in the investment by a number of key actors in focusing on Article 30 to create the single market from the mid‐1960s. These civil servants and lawyers provided the backbone for the Commission's transformation of the Cassis de Dijon judgment (1979) into a powerful tool, driving back the need for legislative harmonisation and making it a cornerstone of the Single European Act of 1986. The article therefore analyses one of the key moments in the transformation of European law.