• A
  • A
  • A
  • ABC
  • ABC
  • ABC
  • А
  • А
  • А
  • А
  • А
Regular version of the site
Bachelor 2020/2021

Capital Market Regulation

Type: Elective course (Law)
Area of studies: Law
When: 4 year, 1, 2 module
Mode of studies: offline
Instructors: Kirill Molodyko
Language: English
ECTS credits: 6

Course Syllabus

Abstract

While the course, we create and develop such students' knowledge and skills. At the same time, we take into account the need to develop both academic and practical skills on a balanced basis for students. So that in future they could choose between academic and practical careers in the field of law, and, perhaps, even combine them. The course is aimed at the interdisciplinary approach to Capital Market Regulation, digital economy and risk assessment of b2b- and b2c- relationships. Namely, the course addresses b2c-contracts between credit organizations, digital and smart contracts, enforcement of which is based on brand-new sophisticated technologies (blockchain, artificial intelligence etc.). During the course the comparative methodology will be applied, i.e. the students will analyze legal provisions of the Russian civil law, the EU law, the US federal law well as the core principles of the Islamic fiqh. Along with development of innovative technologies, consumers get access to the wide spectrum of digital products and services. However, security of digital financial services cannot be guaranteed. Therefore, financial regulations in force shall be taken into account in order to elaborate responsive legal framework, which could be efficiently applied to either b2b-, or b2c-relationships. Sophisticated and proficient approach to capital markets regulation shall instigate the diversity of secure and diversified business relationships. The course “Capital Market Regulation” will result in establishment of up-to-date data environment for the future qualified lawyers. The participants will take a comparative perspective of contemporary capital markets regulation in different countries. Applied business technologies will be covered under the FinTech- section of the course. The participants will take a glance at both risks and perspectives of applied digital business solutions and obtain their own points of view in the regard of on-going legal reform. In conditions of decentralization and shared economy qualified lawyers face up the request for risk assessment. Therefore, elaboration of non-biased expertise in the sphere of financial regulations is vital for deliberate evolvement of economic, political and legal processes.
Learning Objectives

Learning Objectives

  • The course is aimed at creating a new information environment for training professionals focused on creating the right for the future. In particular, such professionals should: - be well aware of the established regulation on the capital market, in particular the activities of commercial banks, credit rating agencies, organizational and ideological aspects of the deposit insurance system, etc. - be ready to face the new technologies like blockchain on a daily basis, - have a clear understanding of the instruments of both Russian federal law, EU law, US federal law and international organizations legal acts relating to the regulation of capital market, such as the WTO, the World Bank, international payment systems standards etc., - understand the mechanism of the digital economy, including the costs of mastering new technologies by business, the order of interaction between business and the state when introducing innovations in the entrepreneurial activity, - be ready to operate with both conventional (western) and Islamic financial instruments, - discover ways in which theory and practice overlap for the benefit of business, the national economy, each individual and humanity as a whole, - learn relevant professional terminology in Russian and English, as well as academic writing standards.
Expected Learning Outcomes

Expected Learning Outcomes

  • be well aware of the established regulation on the capital market, in particular the activities of commercial banks, credit rating agencies, organizational and ideological aspects of the deposit insurance system, etc.
  • be ready to face the new technologies like blockchain on a daily basis,
  • have a clear understanding of the instruments of both Russian federal law, EU law, US federal law and international organizations legal acts relating to the regulation of capital market, such as the WTO, the World Bank, international payment systems standards etc.,
  • understand the mechanism of the digital economy, including the costs of mastering new technologies by business, the order of interaction between business and the state when introducing innovations in the entrepreneurial activity,
  • be ready to operate with both conventional (western) and Islamic financial instruments,
  • be familiar with have a basic level of competence in data analysis, in particular, of mathematical statistics, regression analysis,
  • discover ways in which theory and practice overlap for the benefit of business, the national economy, each individual and humanity as a whole,
  • learn relevant professional terminology in Russian and English, as well as academic writing standards.
Course Contents

Course Contents

  • WTO Regulation of Financial Services
    Four “modes” concept. “Positive list” vs “negative list” approach. Classification of services. Financial services in the general system of services. Ways in which a commitment may be scheduled: “None” vs “Unbound”. Horizontal commitments. Vertical (sector-specific) commitments. Russian commitments in WTO in different financial services. Economic sanctions in international trade.
  • Credit Ratings
    Credit ratings: definition and comparative analysis. Types of ratings. Evaluation of particular obligations and rating categories. Applications of credit ratings. Ratings scales. Independence and avoidance of conflicts of interest. Methodologies, models and key rating assumptions. Disclosure and presentation of credit ratings. General and periodic disclosures. Competition in the credit rating industry. Prohibited acts and practices (optional).
  • Consumer credits
    Different concepts of consumer. Standard information to be included in advertising of consumer credit. Pre-contractual information. Obligation to assess the creditworthiness of the consumer. Information to be included in credit agreements. Right of withdrawal. Open-end and closed-end credit agreements. Linked credit agreements. Early repayment. Assignment of rights. Overdraft and overrunning. Calculation of the annual percentage rate of charge. Special Rules for Private Education Loans and Credit Card Accounts and Open-End Credit Offered to College Students
  • Islamic finance
    The Fundamental Principles of Islamic Economics: prohibition of interest (riba), prohibition of uncertainty (gharar), abuse of rights (zulm), moral hazard (maysir). The Sources of Islamic Banking Law: (1) international treaties and enactments of international organizations; (2) national legislation; (3) legal doctrine; (4) business ethics & soft law. Introduction to Islamic business ethics. The fiqh principles. Types of financial transactions under Islamic commercial law: (1) mark-up principle (mudarabah, ijarah, salam); (2) the profit-and-loss sharing (mudarabah, musharakah, istisna). Project finance under Islamic Business Law. Due diligence and deal structuring. Standartisation under Islamic Financial Law. Closeout netting and master agreements (ISDA, IFSB, IFRM). Implementation of Islamic financial transactions in Russian Federation.
  • Regulation of Payments
    Concept of fee. Statement of fees. Information for consumers. Comparison websites. Payment accounts packaged with another product or service. Switching. Access to payment accounts (non-discrimination, Right of access to a payment account with basic features, characteristics of a payment account with basic features, general information on payment accounts with basic features). Associated fees. Framework contracts and termination.
  • Credit reporting
    Public Policy Objectives. Data. Data Processing: Security and Efficiency. Governance and Risk Management. Legal and Regulatory Environment. Cross-border Data Flows. The Roles of Credit Reporting System Participants. Personal ratings and social control (China).
  • Regulation of Insurance Contracts
    Insurance contract under the Civil Code of Russia. Parties to contract. Mandatory and voluntary insurance. OSAGO contract. Property insurance. Insurance and liability. Insurance and business risks. Confidentiality. Enforcement of the contract.
  • Financial monitoring and compliance
    Public objectives and concepts. Regulations and state authorities. Agents of the financial monitoring. Subjects and operations to financial monitoring. Requirements for compliance programs and internal control. Anti-laundering Measures: KYC, risk-assessment, freezing of assets, etc. International cooperation and FATF. Cryptocurrency and money laundering.
  • FinTech & Smart contracts
    Investment evaluation and financial markets. Blockchain technology, economic and judicial Automation of law. Innovative approach to the reform of Russian civil law and financial transactions. Legal evaluation of legal risks of blockchain use & regulatory gaps. Scenarios and provisions for blockchain regulation. Legal evaluation of blockchain use and economic relationships: entities, objects, legal rights and responsibilities. Legal responsibility. The choice of applicable law & jurisdiction. Definition & concept of the smart contracts in civil and common law. Offer and acceptance. Moment of obligations commencement. Synallagmatic contracts & consideration. Invalidity of smart contracts and legal risks. Legal responsibility and smart contracts: possible scenarios and risks. Restitution / unjustifiable enrichment. Enforcement of obligations: due performance and correlation between “virtual” and “real”. International experience: the US, Germany, the UK, Switzerland. Howey test
  • Regulation of financial ombudsmen
    Chief and sectoral financial ombudsmen. Alternative dispute resolution. Mandatory pretrial settlement. Interaction between financial organizations and financial ombudsmen. Registries of financial organizations. Challenging of the financial ombudsmen decisions before the courts.
  • International Financial Markets Cooperation (BRICS and EAEU) (optional, for excellent students only)
Assessment Elements

Assessment Elements

  • non-blocking Class attendance and Classroom discussions
  • non-blocking Group presentations
  • non-blocking Individual take-home essays
  • non-blocking Mid-term in-class exam
  • non-blocking Final take-home exam
Interim Assessment

Interim Assessment

  • Interim assessment (2 module)
    0.2 * Class attendance and Classroom discussions + 0.4 * Final take-home exam + 0.1 * Group presentations + 0.2 * Individual take-home essays + 0.1 * Mid-term in-class exam
Bibliography

Bibliography

Recommended Core Bibliography

  • МОЛОДЫКО КИРИЛЛ ЮРЬЕВИЧ. (2014). Критика концепции договора банковского счета как самостоятельного вида гражданских договоров.

Recommended Additional Bibliography

  • Lorenzo Sasso. (2016). A Critical Analysis of the Recent Russian Regulation on Credit Rating Agencies. Russian Law Journal, 4(2), 62–82. https://doi.org/10.17589/2309-8678-2016-4-2-62-82