Shaped by the Rules. How Inducement Regulation Will Change the Investment Service Industry

Inducement regulation is intended to target the conflict of interests between financial advisors and their clients. Nonetheless, it may also represent a ‘public policy device’ meant to conform the activity of European distributors with investor protection goals; indeed, by selecting the conditions under which distributors can freely collect inducements, the European regulator simultaneously shapes the market for financial services. Accordingly, ‘spot advice’ (which poorly performed in the past) is indirectly banned by the quality-enhancement provision set forth in art. 24 MiFID II, and the acknowledged importance of on-going monitoring of the portfolio opens up the collection of inducements linked to the provision of ‘periodic advice’. Since this new regime will probably increase the overall costs of investment advice enlarging the ‘advice gap’, the European regulator tries also to foster the development of FinTech permitting the collection of inducements even outside the strict provision of investment advice. Nevertheless, the concerns regarding investor protection raised by FinTech services (which allow only a mere ‘self-assessment’ of the investor’s profile) suggest a broader interpretation of inducement regulation, with the purpose of enabling investment firms to provide low-cost financial advice capable of effectively encompassing every stage of the investment relationship, from the early assessment of clients’ characteristics and objectives to the on-going management of the investments (‘simplified advice’).

The Pricing of European Non-Performing Real Estate Loan Portfolios

ZusammenfassungNon-performing loans (NPL), commonly referred to as loans in arrears for at least 90 days, have continuously been characterized as the top priority of the European Central Bank (ECB) and continue to attract central attention (ECB, 2018a,b). With the outbreak of the European debt crisis, the quality of banks’ assets had deteriorated in a manner that, despite robust economic recovery and a variety of regulatory efforts, NPL still today pose a threat to bank and thrift institutions. Against this backdrop, the European regulator requires banks to develop effective strategies for reducing NPL, to set up clear governance and to operate powerful work-out structures (ECB, 2017).

The effectiveness of MiFID provisions for professional clients: a critical review

Purpose This paper aims to identify the duty of care that applies to ‘professionally classified clients’ based on the recently implemented Markets in Financial Instruments Directive II (MiFID II) as well as the previous Markets in Financial Instruments Directive I (MiFID I). The authors place critical notes on the effectiveness of some MiFID provisions. Design/methodology/approach The authors have reviewed the Delegated Acts of MiFID I and II, as well as Q&A’s of the European Regulator, ESMA and jurisprudence. The authors aim to add value by facilitating a discussion on the effectiveness of applicable MiFID provisions. Findings This review of the legal provisions provides researchers and practitioners in the investment sectors with a clear overview of the legal provisions detailing how these provisions should be met and how improvements to the provisions can be achieved. Practical implications This paper specifies what the provisions for professional classified clients are and facilitates a discussion on the effectiveness of these provisions. Originality/value Addressing the legal provisions which are applicable to ‘professional classified clients’ that derive from MiFID I and II and includes a critical analysis which offers an original perspective.

Counterfeit alcohol distribution: A criminological script network analysis

This paper analyses a series of subsequent and connected investigations by a domestic European regulator on the network of distribution of counterfeit alcohol across two jurisdictions. The analysis mixes script analysis, a narrative framework for enhancing the understanding of how crimes unfold and are organized, with multi-node multi-link social network analysis, to observe the social structure in which crime scripts take place. We focus our attention on the key players that occupy strategic positions within the network of the crime commission process, from where they overview and control the various phases (scenes) and perform brokerage activities across the scenes, and on strategies of concealment of illicit products beyond the facade of legitimate business. Our findings indicate that actors in charge of managing the proceeds of the criminal activity are also the ones better positioned to monitor the entire process. The overall structure of the criminal network shows a good level of resilience and efficiency, although actors do not adopt common traits of a criminal lifestyle that facilitate secrecy and covertness. We believe that, by shifting the analysis from the nature of the group organization to the network of links between all the aspects of a crime commission process, the organizational structure and its weakest links become more detectable, easier to compare across proto- and meta-scripts, and ultimately more prone to situational preventive measures.

Disclose Data Publicly, without Restriction

Ethical, evidence-informed decision making is undermined by the grave concerns that have emerged over the trustworthiness of clinical trials published in biomedical journals. The inescapable conclusion from this growing body of research is that what we see, even in the most highly regarded peer-reviewed journals, cannot be trusted at face value. Concerns of inaccurate, biased, and insufficient reporting of trials are impossible to resolve without access to underlying trial data. Access to such data, including things like clinical study reports—huge, unabridged, detailed reports of clinical trials—would minimise the risk of distortions and selective publication. But the FDA, the world’s greatest custodian of those data, just sits on them. We see no reason why FDA should not publicly release clinical study reports with minimal redactions. The European regulator is already doing this, but FDA’s holdings are far greater. Data transparency is not simply an “opportunity” FDA might consider, but rather an ethical imperative. The Blueprint is good but does not go far enough. We do not need gates, barriers and committees between us and access to aggregate reports on drugs and other interventions which we are prescribing or using daily. Let’s leave the nannies at home.