Financial groups may be defined as groups in which one or more components, legally independent companies, engage in offering financial services to the public, acting as a bank, a broker, an insurance company, an investment adviser or in any other capacity, offering their services to individuals, professional investment managers or other business firms. Firms that exclusively offer financial services to other group entities – the so-called “in-house banks” would be excluded, as these normally do not receive “deposits or other repayable funds” from the public.

A number of ongoing reforms of corporate law are motivated by the need to stimulate entrepreneurship and business creation. Building on the observations that entry is characterised by sunk costs and that the markets for small business finance are imperfectly competitive, we identify a previously overlooked trade-off that such reforms ought to recognise. The appropriate design of the corporate law depends on whether it is the midstream moral hazard and the ensuing lack of finance or the entrepreneurs' inability to recover sunk entry costs that hamper business creation. In circumstances where the former dominates, well-designed mandatory law ought to be efficiency enhancing. In contrast, if the incentives to enter are weak due to the prospect of facing powerful external financiers in the market for post-entry expansion finance, business creation can be boosted by making the law more enabling. Enabling law increases the effective bargaining power of the entrepreneurs in market conditions where their bargaining position would otherwise be weak. It does so by giving the entrepreneurs a credible threat to expropriate the financiers. To the best of our knowledge, neither this trade-off nor the associated effects of corporate law on entry and entrepreneurship have been considered elsewhere in the literature on mandatory v. enabling rules.

The problem of claims heterogeneity makes allocating decision-making powers an arduous task for any insolvency law that aims to vest control over corporate insolvency proceedings in the creditors.

The Czech Insolvency Act 182/2006 is a case in point. One of the Act's chief reform aims was to take control over the proceedings away from the hands of the judges and insolvency trustees and vest it in the creditors.

Five years after the Act entered into force, it is time to look at how it succeeded in its ambition. This article reviews the rules allocating decision-making powers between secured and unsecured creditors in relation to several key ‘turningpoints’ in Czech insolvency proceedings, and also looks at how the initial rules were interpreted and applied by the insolvency courts. It also points to a set of amendments adopted by the Czech Parliament in the autumn of 2013 with a view to codifying those interpretive approaches that were found to work, as well as reversing those where the insolvency judiciary was thought to have drifted away from the original intentions of the Act.

In particular, the article looks at creditors' decisions on (a) the type of proceedings, (b) the appointment, removal, powers and conflicts of the insolvency trustee, (c) the election and removal of the creditors' committee, and (d) the assumption of the creditors' committee's powers by the creditors' meeting.

The article is limited to rules applicable to corporate debtors.

The Hague Conference on private international law has been negotiating for some time a draft Convention on jurisdiction and the recognition and enforcement of foreign judgments in civil and commercial matters. The draft Convention, otherwise known as the Judgments Project, is intended to create common jurisdictional rules for international civil and commercial cases and to provide for the recognition and enforcement of judgments issued by foreign courts under these rules. When discussions began on this Convention, e-commerce was not a consideration as it was not yet a reality. Since then, however, the importance of e-commerce within the context of the Convention has become all too obvious. In recent months, lawyers have gone so far as to tout the Judgments Project as “the most important legal event in the history of cyberspace”. A recent New York Times article even quoted a law school professor as saying that the Convention is “likely to shape the future of international e-commerce”. Some have seised upon the Project as an opportunity to create an international legal framework for the Internet, yet recent negotiations have proved this to be a difficult, if not impossible, task. Interestingly, this is not an isolated occurrence. Other intergovernmental organisations such as the World Trade Organisation (WTO) and the World Intellectual Property Organisation (WIPO) have also had difficulty negotiating international instruments with regard to the Internet, especially relating to the harmonisation of private international law rules. This article discusses the importance of building international co-operation for the development of e-commerce and examines the Internet related problems encountered in the Judgments Project, in an attempt to shed light on why it is so difficult to negotiate such co-operation. This article takes stock of the difficult policy decisions that must be made by States in order to push forward and concludes with some thoughts on how States and intergovernmental organisations might move ahead in obtaining greater international co-operation within regard to the Internet.

The paper presents results of an ongoing research project on corporate financing patterns in Central and Eastern Europe (CEE) since 1999. It addresses three broad issues. What are the specifics of corporate financing in CEE compared to countries in Western Europe? What country institutional and company factors may explain the similarities and differences between capital structures in the EU-15 and New Member States (NMS)? What are the major convergence and divergence trends in corporate financing patterns in an enlarged Europe? The study analyses the interactions between country institutional differences, firm ownership structures, other firm-specific characteristics and corporate financial patterns in both the EU-15 and NMS. It summarises the firm-level evidence and outlines several unresolved questions and major dimensions for further research.

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.

The issue of whether and how to regulate short selling has vexed regulators for some time. While there are a number of potentially damaging consequences that are said to stem from short selling, there is also evidence that it can have beneficial effects on financial markets. In the wake of the collapse of Lehman Brothers in September 2008, and more particularly the falls in the prices of listed financial securities that followed, the regulation of short selling has come back onto the regulatory agenda with a vengeance. Various regulatory techniques, some temporary and some more permanent, have been adopted to deal with short selling. This paper explores those implemented in the US, the UK, Germany and France. The EU has also been developing its regulatory response and in March 2012 the final text of a Regulation dealing with short selling was published. This paper considers the arguments for and against the regulation of short selling, and considers the EU's Short Selling Regulation in the light of these arguments. It is suggested that although the provisions of the EU's Regulation introducing disclosure to the regulator are broadly sensible, as are the provisions designed to foster a stricter settlement regime, other provisions are more problematic and have the potential to cause damage to European financial markets.

The article discusses the most recent corporate governance developments both in Switzerland, in the aftermath of the adoption of the so-called ‘Anti-Rip-off’ Initiative, and in the EU, based on the Action Plan ‘European Company Law and Corporate Governance’. Compared with previous EU Green Papers, the reforms envisaged in the Action Plan issued by the European Commission on 12 December 2012 are moderate and rather cautious. In Switzerland, the adoption of the ‘Anti-Rip-off’ Initiative on 3 March 2013 was a game-changing political decision for the future development of corporate governance in listed corporations. There are many parallels between the most recent developments in Switzerland and the EU. Both jurisdictions see the enhancement of transparency and the increase of shareholders' sense of responsibility when it comes to corporate governance as key objectives. At the same time, differences are emerging between the strategies used in each jurisdiction. While the EU is strengthening both the legal position and the autonomy of shareholders, Switzerland is imposing legal obligations on shareholders to ensure appropriate engagement. This raises the fundamental question of whether the aim of sound corporate governance is better served by the enhancement of transparency and shareholder rights or by intensified legislative intervention. Against this backdrop, this comparative legal article analyses selected reform efforts to strengthen the role of shareholders and to improve transparency on the part of companies, institutional investors, and proxy advisers.

The bonding hypothesis posits that a firm may improve its governance practices by listing in a foreign developed stock market, thereby subjecting itself to better legal and regulatory rules of the foreign market as well as to a superior level of scrutiny by gatekeepers in the market, which are unavailable in the home market. Previous studies have shown that the bonding effect has occurred on Chinese companies listed in Hong Kong. This article specifically questions whether the effect is accrued in the domain of gatekeeper scrutiny. First, it examines the role of four alleged gatekeepers in the stock markets of China and Hong Kong, i.e., sponsor, corporate attorney, credit rating agency, and auditor. Then, it proceeds to consider whether and to what extent Chinese companies are subject to a superior level of scrutiny by these gatekeepers on account of their being listed in Hong Kong.