Category: Financial regulation

A cost-free reparation loan that costs billions and reconstructs nothing

A critical look by Veerle Colaert and Paul Dermine at the wrangling over the Russian assets held at Euroclear

While Trump’s original peace plan appears to be off the table, his proposal to create an investment fund with Russian assets at Euroclear continues to reverberate. Many European leaders are now calling even more forcefully for these assets to be transferred to Ukraine without delay, before the Trump administration mobilises them with its own agenda – and for its own benefit.

The urge to act quickly is understandable, but it is at least as important to keep a cool head. The United States clearly cannot seize the Russian assets held at Euroclear without the EU’s consent. And the reasons for the EU to leave those assets untouched remain as compelling as ever.

Continue reading “A cost-free reparation loan that costs billions and reconstructs nothing”

The SFDR II Proposal: An Overview

A post by Dr. Arnaud Van Caenegem

The European Commission published its proposal for amending the Sustainable Finance Disclosure Regulation (SFDR) on 20 November 2025, accompanied by a Q&A. The proposal also explicitly amends the PRIIPS Regulation and is understood to implicitly “moot” certain provisions of the Taxonomy Regulation that reference the SFDR.

The SFDR has been discussed in a previous post as a disclosure regulation, adopted with the objective to harmonize the provision of sustainability-related information in individual and collective investment activities by financial market participants, financial advisers and financial products. The Commission proposal introduces a second objective: the creation of a harmonized categorization of sustainability-related products.

This post covers the three key proposed changes: a substantial reduction of the obligations for financial market participants, a limitation of the scope to “collective investment”, and a shift from a disclosure to a categorization framework.

Continue reading “The SFDR II Proposal: An Overview”

Duurzaamheid beoordelen kan binnenkort niet langer zonder vergunning

Een post door gastbloggers Chloë De Somviele & Lisa Nelis

Toegang tot kwalitatieve duurzaamheidsdata is al langer een pijnpunt wanneer beleggers rekening willen houden met de ecologische, sociale en governance (ESG) factoren van bedrijven.[1] Correcte informatie over ESG-factoren neemt aan belang toe in de financiële sector om de risico’s en investeringsopportuniteiten ten gevolge van de energietransitie, klimaattransitie en sociale uitdagingen accuraat in rekening te brengen. Bedrijven die ondernemingen op basis van ESG-factoren beoordelen en rangschikken, ook wel ESG-ratingagentschappen genoemd, zijn daarin essentieel maar ook problematisch, aangezien bijvoorbeeld onduidelijk is welke ESG-criteria zij hanteren, welke ESG-criteria zwaarder doorwegen, en hoe ESG-informatie wordt verzameld.  

De Europese Unie regelt reeds bepaalde delen van de beleggingsketen die uitvoerig op deze blog werden besproken, zoals wanneer een economische activiteit ecologisch duurzaam is, over welke duurzaamheidsinformatie bedrijven moeten rapporteren, hoe informatie over duurzaamheid in precontractuele en periodieke documenten van financiële producten moeten worden opgenomen, en hoe in de distributie van financiële instrumenten gevraagd moet worden naar duurzaamheidsvoorkeuren. Uitgevers van ESG-ratings bleven voorlopig buiten schot. Woensdag 24 april keurde het Europees Parlement een compromistekst van februari 2024 goed. Daarmee ligt nu de verordening van toepassing op ESG-ratings ter stemming voor bij de Europese Raad. Hieronder bespreken we de tekst van het akkoord tussen het Europees Parlement en de Raad zoals die door het Parlement werd goedgekeurd.[2]

Continue reading “Duurzaamheid beoordelen kan binnenkort niet langer zonder vergunning”

Sustainable finance en de retailbelegger (2/3)

In het eerste deel van deze reeks werd vermeld dat sinds 2 augustus[1] financiële ondernemingen die beleggingsadvies of vermogensbeheer aanbieden in hun MiFID-geschiktheidstest moet vragen naar de duurzaamheidsvoorkeuren van een cliënt. Dit komt in praktijk bovenop de reeds lange vragenlijst over uw financiële situatie, beleggingsdoelstellingen, en kennis en ervaring op beleggingsgebied die u als retailbelegger typisch krijgt voorgelegd op een beleggingsgesprek bij uw financieel adviseur. Hopelijk krijgt u een natje en droogje aangeboden tijdens het invullen.

De bedoeling is dat financiële instellingen op basis van die informatie enkel nog beleggingsproducten adviseren die in overeenstemming zijn met de visie van de cliënt op milieu en maatschappij. De achterliggende idee van de Europese wetgever is dat hierdoor de vraag naar duurzame producten zal toenemen, waardoor duurzame projecten goedkopere financiering zullen krijgen en dus sneller kunnen worden uitgevoerd.

Concreet moeten minimum – in de praktijk zullen het er veel meer zijn – drie vragen worden gesteld over duurzaamheid op basis van de MiFID-regelgeving:

Continue reading “Sustainable finance en de retailbelegger (2/3)”

Asset Managers, Systemic Risk and the Need for Tailored SIFI Regulation

A post by guest blogger Joeri De Smet (Jan Ronse Institute, KU Leuven)

The age of asset management may be upon us. The industry has grown rapidly over the last decade and the market power of its major players has been analysed from different points of view, including corporate governance and competition policy. In a recent paper, I analyse the nexus between asset management and financial stability. Specifically, I ask the question whether asset managers can be systemically important and, if so, how EU and US regulators should respond.

Both jurisdictions already regulate systemically important financial institutions: the US implemented such regulation as part of the Dodd-Frank Act in 2010; the EU included it in the 2013 Capital Requirements Directive. Systemically important financial institutions or “SIFIs” are institutions that can cause or amplify systemic risk. Systemic risk, in turn, is “a risk of disruption to financial services that is caused by an impairment of all or parts of the financial system and has the potential to have serious negative consequences for the real economy” (as defined by the IMF, FSB and BIS in 2009). But current SIFI regulation does not account for a scenario in which asset managers and/or investment funds become systemically important. The designation procedure and regulation in the EU is tailored to banks, while the US system does leave room for designation of asset managers but makes it impossible in practice – particularly after reforms under the Trump administration. In addition, there is no scholarly consensus on the question whether SIFI regulation for asset managers would be useful.

Continue reading “Asset Managers, Systemic Risk and the Need for Tailored SIFI Regulation”

A blank cheque for SPACs? 

The regulator, SPAC and investor point of view – 29 October 2021

“Q1 of this year will go down as the 2000 internet bubble for SPACs. There was a unique confluence of factors that drove that insane risk-seeking behaviour, particularly at a retail investor level.” – FT, 27.09.2021

The next EU Financial Law clinic (Jan Ronse Institute, KU Leuven) will deal with one of the most intriguing phenomenons of this year: “special purpose acquisition companies”, or SPACs for short.

SPACs, short for “special purpose acquisition companies”, are companies without commercial operations or material assets. Once incorporated, they aim to raise money through an IPO to then buy another already existing company. Which company will be acquired is typically unknown at the time of the IPO. Investors therefore indeed give a “blank cheque” to the SPAC.

SPACs were probably one of the hottest product in the US investment industry in early 2021. In Europe, the picture is more diverse. While there have been over 32 SPACs in the Netherlands this year to date, Belgium is still waiting for its first SPAC.

In this financial law clinic, our four distinguished speakers will explore the topic of SPACs from a regulatory, practical and investor protection perspective. They will first discuss the process of creating a SPAC and the subsequent de-SPAC procedure, with attention for the practical and regulatory challenges involved, based on practical experience with cases in the Netherlands and Luxembourg. They will then focus on the (potential) regulatory framework (prospectus, MiFID product governance, market abuse, and AIF legislation) and compare the SPAC-process with traditional IPOs. In addition, the speakers will address the question why certain Member States seem to attract many more SPACs than others, and analyze the diverse supervisory responses to the phenomenon (by ESMA and several national regulators). Finally, the speakers will discuss potential causes for the recent difficulties experienced by SPACs and the future potential of the phenomenon.

Our four speakers are experts in this area. Gregory Frigo is a senior policy officer at the European Securities and Markets Authority (ESMA) and has been working on the recent ESMA guidance on SPACs. Annemie Rombouts will present the FSMA’s recently published minimum standards for SPACs. Martijn Schoonewille, attorney at law at the Loyens&Loeff Amsterdam office, has advised several SPACs in both the Netherlands and Luxemburg.  Vanessa Marquette, attorney at law at the Loyens&Loeff Brussels office, has analyzed the regulatory constraints for SPACs in Belgium and conducted a comparative overview of the treatment of SPACs in Belgium, Luxembourg and in the Netherlands.

Continue reading “A blank cheque for SPACs? “

The new prudential framework for investment firms – More fit for purpose?

A post by guest bloggers Ivan Peeters, Charles-Henri Bernard and Leopoldo Luyten de Alvear

1. Investment firms play a key role in modern financial markets and in advising professional and retail clients. In particular they assist in matching investors and funds to be invested with investment opportunities and funding needs. The current market situation combines a structural low interest rate environment on the one hand and an expected surge of projects that need funding or equity. Such surge will not in the least be driven by ESG (environmental sustainability targets in particular) and by the efforts to re-open the economies in Western Europe.

2. In December 2019, the EU Parliament approved the new prudential framework for investment firms in the Investment Firm Directive (“IFD”) [1] and Investment Firm Regulation (“IFR”)[2] to be implemented in the European Union (“EU”) by 26 June 2021. This represents a significant reform in the EU regulatory framework and will have a material impact on most investment firms. In the Belgian regulatory landscape, investment firms are either stockbroking firms (sociétés de bourse / beursvennootschappen) or portfolio management companies(société de gestion de portefeuille et de conseil en investissement / vennootschappen voor vermogensbeheer en beleggingsadvies). Continue reading “The new prudential framework for investment firms – More fit for purpose?”

Crypto-assets: regulators and regulations trying to catch up with innovation without stifling it?

A post by guest bloggers Ivan Peeters, Philip Van Steenwinkel and Frederik Stappers

1. Over the past few years crypto-assets have garnered significant attention from the media, financial analysts, governments, regulatory institutions and investors. However, this year interest in crypto-assets has skyrocketed. With big investments of corporates, investment funds and millions already being raised by Initial Coin Offerings, it shows that crypto-assets are maturing and here to stay. In this post we provide some considerations in relation to the legal and regulatory characterisation and regulatory treatment of token offerings and the most common crypto-assets. Continue reading “Crypto-assets: regulators and regulations trying to catch up with innovation without stifling it?”

Looking ahead for likely changes to the EU legislation on Alternative Investment Fund Management

A post by guest bloggers Ivan Peeters and Charles-Henri Bernard

1. Investment funds play a key role in modern financial markets to give investors access to investments with the benefit of different layers of structural and regulatory protections. A large and efficient market for investment funds also serves to help sponsors of projects to get access to the large amounts of value that today’s investors seek to invest. This will in particular also apply for the exponentially growing need to invest in sustainable, forward looking projects.

2.  Against this background, the European legislation has created a financial regulation framework for (a) the authorisation and supervision of alternative investment fund managers (AIFMs), (b) the oversight of AIFMs’ activities and services, in their home country as well as in other EU jurisdictions, and (c) the marketing of alternative investment funds (AIFs) (i.e. the distribution of securities issued by AIFs). AIFs are investment funds that are not regulated at EU level by the long established UCITS Directive[1], meaning they are not regulated at “product level” (structure, securities …). Only their management is regulated. AIFs include hedge funds, private equity funds, real estate funds, investment trusts, infrastructure funds and a wide range of other types of investment funds.

3. The key piece of legislation is the Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers (the AIFMD). It entered into application on 22 July 2013. Continue reading “Looking ahead for likely changes to the EU legislation on Alternative Investment Fund Management”

Algorithm-Driven Information Gatekeepers: Legal and Regulatory Aspects

A presentation by Professor Aline Darbellay (Centre for Banking and Finance Law at the University of Geneva)

Prof. Aline Darbellay (Centre for Banking and Finance Law at the University of Geneva) discusses “Algorithm-Driven Information Gatekeepers: Legal and Regulatory Aspects” in a presentation of 15′.

She argues that information gatekeepers manage the flow of information from issuers to investors. The focus of securities regulation was traditionally laid on mandatory disclosure requirements. In modern financial markets, information production is no longer the core issue. Concern has increasingly been raised about the role of information intermediaries as screeners of relevant information. Continue reading “Algorithm-Driven Information Gatekeepers: Legal and Regulatory Aspects”

Public interest and data governance of financial market infrastructures

A presentation by Dr Joseph Lee (University of Exeter)

Dr Joseph Lee, Co-Director of Centre for Corporate and Commercial Law and  Senior lecturer in law,  University of Exeter , discusses in a slidecast the  role of financial market infrastructures (“FMI”), such as stock exchanges, in generating public goods in the age of digitalisation of data.

He identifies what public goods FMIs can produce, discusses what public interests can be achieved through these public goods and analyses the legal and regulatory implications for FMI’s data management, data policies, and data governance. Continue reading “Public interest and data governance of financial market infrastructures”

Sustainable Finance

A presentation by Arnaud Van Caenegem, PhD Researcher (KU Leuven)

Two years have passed since the European Commission published its Action Plan: Financing Sustainable Growth to mainstream sustainability into the financial system. A presentation (16′) by Mr. Arnaud Van Caenegem, PhD Researcher (KU Leuven) covers the coming about of the action plan, its objectives and the progress made, with a particular focus on the Taxonomy Regulation and the Regulation on Sustainability-related Disclosures. It also highlights the major implications of the European Green Deal for the financial sector and elaborates on the next steps in its transformation. Continue reading “Sustainable Finance”

Towards harmonisation of bank insolvency laws

The harmonisation of insolvency rules for European banks was recently put on the table by Germany’s finance minister Olaf Scholz, together with other measures (such as a European deposit insurance scheme) destined to advance the banking union (see his position paper on the goals of the banking union).  According to Minister Scholz:

The lack of harmonisation in this area complicates the resolution of banks with cross-border operations. This becomes particularly problematic when banks and creditors are better placed in proceedings under national insolvency legislation than they would be with a resolution in accordance with the Bank Recovery and Resolution Directive. When this happens, national insolvency legislation undercuts the provisions that are tailored to fit the specific set of interests at play when a bank is wound down.

What is more, the SRB also needs to take into account 19 different national insolvency regimes when performing a resolution due to the no-creditor-worse-off principle, which stipulates that no creditor may incur greater losses as a result of a resolution than they would have in national insolvency proceedings. This is complex, increases legal and compensation risks and results in groups of creditors receiving different treatment despite being fundamentally the same.

For this reason, we need a single European set of laws on bank insolvency.

Coincidentally (or not), a study on the differences between bank insolvency laws and on their potential harmonisation was recently published (the report and the executive summary can be found here). The abstract from the executive summary reads as follows:

 The resolution framework set out under Directive 2014/59/EU (‘BRRD’) provides EU Member States with comprehensive and harmonised arrangements to deal with failing banks at a national level, and is complemented in the euro area by the Single Resolution Mechanism Regulation (SRMR) that sets out a euro-area-wide resolution framework. But under EU law, unlike in the United States, resolution does not function as a standalone substitute for national insolvency proceedings. This study identifies the national insolvency procedures applicable to banks and analyses key differences between them, notably concerning the circumstances according to which the application of reorganisation or winding-up procedures is triggered, the ranking of liabilities, and the available tools to manage bank crises. By highlighting the differences that can be found in the legislative regimes applicable at national level and determining how these national insolvency regimes differ from the resolution regime as set out in the BRRD and SRMR, the study assesses the potential disadvantages that result from the lack of harmonisation of these bank insolvency regimes. Taking these disadvantages into account, policy options are outlined to address these divergences. The feasibility, benefits, obstacles and impact of these options are discussed. In terms of future revision of the current framework, more clarity and predictability of the applicable regime should be sought, particularly for medium-sized banks, with a holistic approach to reform that also takes into account related policies such as those on state aid control and deposit insurance.

 

 

Locating pure economic loss: jurisdiction over prospectus liability under Article 7(2) of the Brussels I Regulation Recast

A post by guest blogger Michiel Poesen

In C‑304/17 Helga Löber v Barclays Bank plc, the CJEU had the opportunity to revisit its case law regarding jurisdiction over prospectus liability. The relevant ground for jurisdiction is Article 7(2) of the Brussels I Regulation Recast (previously Article 5(3) of the 2001 Brussels I Regulation): A person domiciled in a Member State may be sued in another Member State in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred or may occur. The ECJ confirmed that in the context of prospectus liability, the place where the harmful event occurred can be exceptionally located in the claimant’s domicile. Continue reading “Locating pure economic loss: jurisdiction over prospectus liability under Article 7(2) of the Brussels I Regulation Recast”

Regulating Finance: Levelling the Cross-Sectoral Playing Field

A guest post by Veerle Colaert on a conference in Nijmegen (15 and 16 October 2018)

Financial law as we know it today mirrors the traditional structure of the financial industry. In most legal systems, it is thus divided into banking, insurance and investment services law. Over the past few decades, however, the clear separation between financial sectors has gradually evaporated, as business lines have converged across sectors. Moreover, various FinTech solutions have emerged, which do not fit traditional sector boundaries. This raises the question whether a more cross-sectoral approach to financial regulation is warranted. Continue reading “Regulating Finance: Levelling the Cross-Sectoral Playing Field”