How to Tackle Spoofing Through Market Design

By Daniel Ladley, Nathalie Oriol and Iryna Veryzhenko December 20, 2024 by renholding

The recent scandal involving TD Securities LLC[1] has served as a stark reminder of the dark side of high-frequency trading. While this particular case has garnered significant attention, it is far from an isolated incident. Spoofing, a form of …

A&O Shearman Discusses UK Digital Securities Sandbox

By Nick Bradbury, Damian Carolan, Barnabas Reynolds, Gregory Talbot, Giannis Giortzis and Louise Bralsford October 21, 2024 by renholding

On 30 September, the UK Digital Securities Sandbox was officially declared open. The announcement was made by the Bank of England (BoE) and the UK Financial Conduct Authority (FCA), following the consultation earlier this year on …

Serendipity and Self-Regulation: The Case of Cryptocurrency-Based ETPs

By Onnig H. Dombalagian October 10, 2024 by renholding

Cryptocurrency enthusiasts rejoiced when the Securities and Exchange Commission (SEC) approved the listing of bitcoin – and ether-based exchange-traded products (ETPs) – on U.S. stock exchanges earlier this year. There is yet a certain irony in this outcome: Why did …

How Raising Equity During Economic Downturns Can Reduce Financial Strain

By Styliani Panetsidou and Angelos Synapis October 4, 2024 by renholding

Economic downturns disrupt firms’ operations and strategic decisions and impair their financial health. During the recent pandemic, for example, many companies were forced to reduce expenses or lay off employees, driving the U.S. unemployment rate to 14.7 percent in 2020, …

Shareholder Voting and Citizen Democracy Interact in Providing Public “Goods”

By Robin Döttling, Doron Levit, Nadya Malenko and Magdalena Rola-Janicka July 11, 2024 by renholding

Concerns that public policy and regulation have been ineffective in addressing climate change and similar challenges have led to a search for possible solutions in financial markets. Investor activism promoting socially responsible corporate practices, the rise in environmental and social …

Why Multi-Class Shares Are Good for Society

By Timo Kaisanlahti February 15, 2024 by renholding

Pension funds and other institutional investors rail against dual-class shares and other tiered voting structures while companies fight vigorously to defend them. The debate over the “one share one vote” doctrine is not, however, solely jurisprudential – economists have conducted …

Davis Polk Discusses the FSOC Annual Report

By David L. Portilla, Luigi L. De Ghenghi, Eric McLaughlin, Gabe Rosenberg and Margaret E. Tahyar January 5, 2024 by renholding

The Financial Stability Oversight Council released its 2023 Annual Report, highlighting its 2023 activities, significant financial market and regulatory developments and potential emerging threats to U.S. financial stability. The 2023 Annual Report newly identifies artificial intelligence and insurance as vulnerabilities …

Visual Information in the Age of AI

By Sean Cao, Yichen Cheng, Meng Wang, Yusen Xia and Baozhong Yang August 17, 2023 by renholding

Information disclosed by corporations plays a fundamental role in shaping asset prices and the expectations of investors. That information typically comes in financial statement releases, conference calls, annual reports, and the news media. In a recent paper, though, we …

How Market Structures Can Prevent the Misuse of Funds Intended for ESG Projects

By Dongkyu Chang, Keeyoung Rhee and Aaron Yoon August 16, 2023 by renholding

A tremendous amount of capital has already been committed to environmental, social, and governance (ESG). With it has come mounting concern over monitoring and guiding the proper integration of ESG into firms. ESG integration is not straightforward due to the …

The FTX Collapse: Why Did Due Diligence, Regulation, and Governance Evaporate?

By Georges Ugeux November 30, 2022 by renholding

FTX[1] is a Bahamas-based cryptocurrency exchange founded in 2019 that, at its peak in 2021, had over 1 million users, making it the world’s third largest crypto exchange by volume. Since November 11, 2022, though, FTX has been in …

African Capital Markets: The Case of the Democratic Republic of Congo

By Georges Ugeux and John Mbuluku October 24, 2022 by renholding

On June 21, 2021, the International Monetary Fund (IMF) weighed in on the economic situation in Africa, and the news was not good.

“African economies are at a pivotal juncture,” the IMF said. “The COVID-19 pandemic has brought economic activity …

Finance Without Law: The Case of China

By Shitong Qiao September 20, 2022 by renholding

In a new article. I investigate how two financial markets of trillions of dollars each have developed extralegally in the past two decades, creating risks of regulatory enforcement actions and contract defaults. More specifically, I examine (1) how Chinese internet …

Machine Learning, Algorithmic Trading, and Manipulation

By Megan Shearer, Gabriel Rauterberg, and Michael Wellman September 19, 2022 by renholding

Trading in financial markets is increasingly dominated by algorithms. They enable trading at speeds and levels of adaptiveness that are impossible for human beings. A key question for the legal system is whether these algorithms will disrupt the efficiency and …

SEC Chair Gensler Speaks at Conference on Financial Market Regulation

By Gary Gensler May 9, 2022 by renholding

The field of economic research is central to our work at the SEC. It helps shape every aspect of our policymaking, from the early design phase to the proposing releases to the consideration of public comments to the adopting releases.

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SEC Chairman Gensler Speaks Before the Investor Advisory Committee

By Gary Gensler March 11, 2022 by renholding

It’s good to be back with the Investor Advisory Committee (IAC) again. As is customary, I’d like to note that my views are my own, and I’m not speaking on behalf of the Commission or SEC staff.

I’d like to

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How Does Better Access to Public Firm Disclosures Affect IPO Firm Financing?

By Shawn Shi January 7, 2022 by renholding

Financial markets affect the economy in a fundamental way by facilitating the creation of capital. The market for initial public offerings (IPO) – also known as the “primary market” – is especially important because it allows fast-growing and innovative companies …

SEC Chair Gensler Testifies Before U.S. House Committee on Financial Services

By Gary Gensler October 7, 2021 by renholding

Good afternoon, Chairwoman Waters, Ranking Member McHenry, and members of the Committee. I’m honored to appear before you today for the second time as Chair of the Securities and Exchange Commission. As is customary, I will note that my views

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Reforming the Macroprudential Regulatory Architecture in the United States

By Kathryn Judge and Anil Kashyap July 26, 2021 by renholding

When the COVID-19 pandemic shuttered major economies in March 2020, it also wreaked havoc on financial markets. In the first few weeks of March, investment-grade corporate bonds lost roughly a fifth of their value, on par with the declines in …

Risk and Ambiguity in Turbulent Times

By Menachem Brenner and Yehuda Izhakian July 9, 2021 by renholding

Over the past 50 years, the financial markets have been rocked by major shocks, which have led to the introduction of financial instruments that could cope with uncertainty in general and extreme events in particular. To manage the uncertainty surrounding …

Mind the (Data) Gaps: SEC Commissioner Speaks at Conference on Financial Market Regulation

By Caroline A. Crenshaw May 17, 2021 by renholding

Before I begin my remarks, I need to mention that the views that I express today are my own and do not necessarily reflect the views of the Commission or its staff.

To start, I want to note that I

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