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    The law of financial advice, investment management, and trading / Lodewijk van Setten.

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    • Title:The law of financial advice, investment management, and trading / Lodewijk van Setten.
    •    
    • Author/Creator:Setten, L. D. van (Lodewijk D.), 1967- author.
    • Published/Created:Oxford, United Kingdom ; New York, NY : Oxford University Press, 2019.

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    • Library of Congress Subjects:Financial services industry--Law and legislation--European Union countries.
      Financial services industry--Law and legislation--Great Britain.
      Financial services industry--Law and legislation--United States.
      Investment advisors--Legal status, laws, etc.
    • Edition:First edition.
    • Description:xxix, 370 pages : illustrations ; 26 cm
    • Summary:This work analyses the law and regulation relating to financial investments, their markets, payment and settlement systems, as well as the duties and liabilities of intermediaries, providing invaluable legal and practical guidance regarding legal risk and the protection of the investor. The book is divided into three parts. Part I categorises the various financial assets legally and analyses their legal, regulatory, and risk/return properties, and examines what protections are available to investors who own financial assets. It also addresses the investment principles that underpin the investment processes. Part II addresses the process by which financial assets may be acquired and disposed of via the markets and the market infrastructure, including central counterparty and clearing features as well as payment and settlement systems. It analyses the risks investors face in the context of trading and settlement. The impact of the principles and risks, described in Parts I and II respectively, inform the scope of the duties, responsibilities and liabilities of the intermediaries that advise investors. Part III focuses on the role of these intermediaries, tying together the constituent components of the investment cycle from the investor's point of view and examining the quality of investor protection, service, proprietary protection and regulatory supervision. Written by a specialist with broad market experience this book is an essential purchase for all lawyers advising investors, financial advisors and investment managers.
    • Notes:Includes bibliographical references and index.
    • ISBN:9780198826378 (hardcover)
      0198826370
    • Contents:Machine generated contents note: 1. Overview and Glossary
      A. Subject Matter, Objective, and Organization of This Book
      B. Investment Cycle and the Investment Professionals
      1. stages of the investment cycle
      2. Investment services are professional services
      C. Inherent Risks of the Investment Cycle
      1. Conduct risk
      2. Product governance is a special form of conduct risk management
      3. Credit and systemic risks
      D. Investment Firms as Agents of the Investor
      1. creation and use of agency authority
      2. Apparent authority
      3. Disposition of property
      4. Warranty of agency authority
      5. Conflict of laws
      E. Glossary
      2. Financial Assets and Investment Risk
      A. Financial Assets
      1. What is a financial asset?
      2. Primary financial assets: equity and debt interests
      3. Secondary financial assets: collective investment schemes and securitization
      4. Meta-financial assets: derivatives
      5. Securities financing and short selling transactions
      B. Investment Risk
      1. value of a financial asset
      2. concept of `risk'
      3. concept of `investment risk'
      4. Measuring investment risk: volatility
      5. Measuring investment risk: tail risk
      6. Measuring investment risk: stress testing
      C. Investment Risk in a Portfolio Context: The Effect of Covariance
      1. Investment risk reduction through diversification
      2. Short selling increases investment opportunities
      D. Optimizing Risk and Return Relationships
      1. Returns that relate to systematic risk factors (beta)
      2. Informational efficiency of the markets
      3. Returns that are not related to market factors (alpha)
      4. Measuring alpha
      5. Relative risk: tracking error
      3. Safeguarding Financial Assets
      A. Safeguarding Ownership Rights in Account-based Assets
      1. Money and securities are fungible assets
      2. MiFID II duty to safeguard money and securities
      B. Safeguarding Money
      1. Amounts owed as a bank and netting in current account
      2. Amounts owed not as a bank but as an investment firm: client money pools
      C. Safeguarding Securities
      1. Immobilization and dematerialization of securities
      2. Safeguarding the cross-border custody chain
      3. Securities accounts create equitable co-ownership
      4. English law and the chain of custody
      5. Settlement of the trust on a common fund of client securities
      6. hybrid legal nature of the securities account
      D. Safeguarding CCP Cleared Contracts
      1. Clearing of contracts in a CCP system
      2. Safeguarding CCP cleared contracts and collateral
      E. Mitigating Counterparty Risk: Collateralization and Netting
      1. Collateralization and netting techniques
      2. Protection of financial collateral (the Collateral Directive)
      4. Legal and Regulatory Duties to Protect the Client's Interest
      A. Information about the Financial Asset and the Investment Service
      1. investor relies on information from the investment firm
      2. Misrepresentation
      3. notion of `assumption of responsibility' at law
      4. `Assumption of responsibility' versus `appropriateness' and `suitability'
      5. Suitability in the context of portfolio management
      6. Effect of client classification on the scope of the regulatory responsibility
      B. Caveat Emptor versus the Client's Interest
      1. client's best interest rule of MiFID II
      2. Fiduciary duties
      3. client's best interest rule of MiFID II versus fiduciary duties
      C. MiFID II's Control Framework for Conflicts of Interest
      1. Categories of conflicts: MiFID II versus equity
      2. Special conflict rules: inducements
      3. Special conflict rules: remuneration
      5. Client Agreements and Compensatory Damages
      A. Client Agreements and the Applicable Standard of Skill and Care
      1. Construction of client agreements
      2. Pre-contractual dealings
      3. Standard of care, agency, and other duties implied by law
      4. Implied duties of the client
      5. regulatory standards of care and construction of the client agreement
      6. (remarkable) provision of Article 69(2) of MiFID II
      7. Exclusion of liability
      B. Subcontractors (Outsourcing)
      1. Governance and control of outsourcing risks
      2. Authority to delegate and liability for outsourcing
      C. Compensatory Damages for Conduct Breaches
      1. Losses from acts or omissions of an investment firm
      2. loss must have been caused by the breach
      3. Remoteness of damages (scope) in contract, tort, and equity
      a). Contract
      b). Tort
      c). Equity
      d). Synthesis
      4. Quantum of damages
      6. Trading and Settlement
      A. Trading
      1. Trading venues
      2. Price forming and transparency
      3. Order-driven trading services and broker conflicts
      4. Trading capacity: broker or dealer?
      5. Best execution
      B. Settlement
      1. Post-trade discharge of cash and securities settlement obligations
      2. Anatomy of a funds transfer
      3. Anatomy of a book-entry securities transfer
      C. Settlement Finality
      1. importance of settlement finality
      2. Payment and settlement systems do not pass the original property
      3. Adverse claims sourced in law or equity
      4. Adverse claims sourced in the Insolvency Act 1986
      5. Protection of payment and settlement systems (the Settlement Finality Directive)
      7. Investment and Wealth Management
      A. Investment Management
      1. legal characteristics of the investment management relationship
      2. function of the investment manager
      3. Collective (pooled) portfolio management
      4. Investment strategies and investment styles
      5. terms and conditions of the investment management agreement
      6. skill and care in the exercise of investment discretion
      7. Trading by the investment manager
      8. Best execution duties of an investment manager
      B. Wealth Management
      1. bundle of services
      2. Advised transactions.
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