Andrea PerroneFrom: Liability of Financial Supervisors and Resolution Authorities
Edited By: Danny Busch, Christos Gortsos, Gerard McMeel QC
The liability of financial supervisors under Italian law stands out for a checkered course. After decades of case law declining jurisdiction in civil liability cases against public authorities, since the mid-1990s, in a few instances, courts awarded damages to investors for losses caused by negligent supervision. In the early 2000s, the pendulum swung back. A statutory restriction made financial supervisors’ liability conditional on intent or gross negligence, and new cases withered. The national act implementing the Bank Recovery and Resolution Directive extended the same restriction to the resolution authority. Following the crisis of some local banks, however, a few cases, in part still pending, were brought against financial supervisors and the resolution authority in most recent times. This chapter discusses liability standards, addresses the liability of financial supervisors in practice, and offers a comprehensive evaluation of the relevant matter.
Andrea PerroneFrom: Prospectus Regulation and Prospectus Liability
Edited By: Danny Busch, Guido Ferrarini, Jan Paul Franx
This chapter zooms in on the ‘light’ disclosure regime for small and medium-sized enterprises (SMEs). It shows that SME financing through capital markets is no easy task. On the supply side, adverse selection and lack of liquid secondary markets hamper the access of both retail and professional investors. On the demand side, lack of financial literacy, costs of compliance, and the possibility for the owners to lose control of the firm discourage SMEs from turning to capital markets for funds. For both reasons, it is therefore understandable why SMEs are typically financed through banking and banks maintain a ‘monopolistic’ power over SMEs. In this context, the chapter argues that the light disclosure regime introduced by the Prospectus Regulation is mostly toothless. Still shaped by the ‘myth of the informed layman’ and of little use to institutional investors, the EU Growth prospectus does reduce compliance costs for issuers but suffers the lack of a EU-based ‘eco-system’ fully supporting SMEs seeking finance.
Andrea PerroneFrom: Capital Markets Union in Europe
Edited By: Danny Busch, Emilios Avgouleas, Guido Ferrarini
In accordance with the EU's traditional focus on small and medium-sized enterprises (SME) financing and its more recent attempt to support SME access to capital markets, Directive 2014/65/EU (MiFID II) has introduced the new category of SME Growth Markets (GMs). Aimed at preserving the status quo, in which SMEs prefer second-tier exchange-regulated markets, typically in the form of multilateral trading facilities (MTFs), the MiFID II rules employ a ‘light touch’ approach. Under the new regime SME GMs: (1) constitute an optional feature of the MTF regime intended to result in a ‘specific quality label’, and (2) are subject to the rules established by each Member State as applied by the local national competent authority, within the very broad framework provided by MiFID II. This chapter argues that the MiFID II regulation pertaining to SME GMs represents a missed opportunity, if not a source of potential harm to the capital-raising efforts of SMEs.