After a slow start, the European Company (Societas Europaea – SE) has become increasingly popular. Besides documenting the growth of this new company type, we examine whether firms choose to incorporate in the SE corporate form because they engage in ‘legal arbitrage’ by exploiting differences in legal rules between jurisdictions. We specify a number of hypotheses on particular legal arbitrage motives. To validate our hypotheses, we use a broad telephone survey among SE users in Germany as well as a simple country-level regression model based on a unique, hand-collected dataset on SE incorporations. We find strong evidence that firms use the SE to mitigate the effect of mandatory codetermination rules. Establishing a one-tier board structure (in jurisdictions that impose a two-tier structure on their national public companies) and taking advantage of the SE's mobility for tax purposes also seem to be driving SE formations. By contrast, our analysis fails to support the suggestion that firms use the SE to shop for the most favourable national company law to fill the gaps in the SE Regulation.

We apply the paradigm of the firm as a nexus of contracts to the debate on regulatory competition vs. unification of law as an alternative way of regulating the business corporation. This approach views the business corporation as a set of coordinated contracts among different parties. Agency problems and related agency costs are the result of this interaction. The economic analysis of corporate law, securities regulation and bankruptcy law identifies law as a means to minimise such agency costs. In this paper, we develop a model where companies are heterogeneous in their preferences about the legal regulation of contractual relationships. We then compare a regime of regulatory competition with one of single supply of regulation and we analyse their relative costs and benefits.

A wave of company law reform has swept across Europe and has now reached Denmark, where a proposal for a new combined companies act has been put forward and will soon enter the legislative process. In this article, the driving forces behind these reforms are explored. They are: the freedom to choose among the company law regimes of the European Union that follows from the case law of the EC Court of Justice; the demise of the doctrine of protection of capital; and the increasing insignificance of the distinction within company law between public and private limited companies. The main tenets of the Danish reform are: the introduction of a combined companies act to cover both the public and the private limited company; the possibility to choose between the main corporate governance models known in European company law, which, in combination with the possibility to use English at board meetings, the general meeting of shareholders and in public documents and accounts, should cater to the needs of cross-border business and investment; and a relaxation of the capital regime allowing limited companies more freedom in deciding the structure of their share capital and the distribution of control.

Private equity has become a multi-trillion dollar business in recent years, but its rapid growth has been accompanied by public controversy and calls for regulation. I review the policy debate, from voluntary best practice codes of UK private equity firms to proposals for supervision and control by continental European socialists, and analyse the economic case for regulation. I find little evidence of market failure and strong arguments for private ordering by investors, banks and labour unions, who appear to have both the ability and the incentives to safeguard against managerial conflicts of interest, excessive debt and other maladies. In contrast, it is doubtful whether politicians have sufficient information to fine-tune activity in this area, and more or less unpredictable policy changes may cause significant harm to business confidence. Altogether, the case for regulation is weak. However, if political pressures to ‘do something’ are overwhelming, as they currently appear to be, greater disclosure and transparency may be the least costly alternative.

This is a case study of the German securities regulator's (BAFin) decision on the Schaeffler case of 21 August 2008, which concluded that the Schaeffler Group's strategy for building up a controlling stake in Continental AG did not violate German disclosure rules. Moreover, it assesses whether the Schaeffler strategy would have been disclosed if the amendments to the German disclosure rules made by the Risk Limitations Act of 21 August 2008 had been in force at the time Schaeffler built up its swap position in Conti. In contrast to BAFin's decision, I hold that Schaeffler's swap long positions prompted disclosure requirements under the ‘holding on behalf’ provision of Article 10(g) of the European Transparency Directive 2004/109 as implemented in German securities and takeover law. While BAFin's decision was subject to the specifics of the case at hand, inadequate enforcement rules help explain why Schaeffler took the risk of regulatory action in the first place. Rather than relying on ex-post enforcement, I argue in favour of developing a self-regulatory, ex-ante enforcement scheme using the model provided by antitrust leniency programmes.

The legal framework of telecommunications regulation is about to change. This is due to the reform package which the Commission submitted in November 2007. The European Parliament and the Council of Ministers are still to approve. There is ongoing political debate. Unfortunately, it does not cover the crucial issue: is the sector-specific ex ante telecommunications regulation still justified after ten years of liberalisation and a partly dramatic evolution towards competition? The author replies in the negative from a historical, a regulatory policy and an analytical perspective. De lege lata, the three-criteria test, if applied correctly, induces this outcome. De lege ferenda, a sunset rule, if need be a qualified one, would be useful.