Capital Markets

Module code: LW7008

Module co-ordinator: Dr Mark Hsiao

Module Outline

This course is specially designed for postgraduate studying finance and financial law. It is designed to contribute to your understanding of the ways in which the contractual relationship between financial intermediaries and their customers as such.

Introductory sessions will examine the public regulations of financial markets, that is, the relationship between central government, independent government agencies or indeed international organization on the one hand and financial markets or market participants on the other. The course also focuses on the private law of the financial markets drawing specific emphasis on the capital market by selective products (OTC derivatives (ISDA Master Agreement), Bond, Eurodollar bond and Securitisation). Thus the course will briefly, in light of the last financial crisis, discuss the main reasons for government intervention in financial markets by analysing the inherent weaknesses of the financial system and explain the role of law in correcting those deficiencies and examining the importance of capital regulation for stability of the banking system.

This course also introduces the existing and forthcoming regulatory components of the global financial system towards a stronger global financial system following a recent sequence of devastating financial crises in the US, UK, and Europe. In particularly, this course will discuss the legal aspect of OTC derivatives, based on ISDA Master Agreement 2002, and the impact of Lehman Brothers bankruptcy filing. This will lead to discussion of the recent G20 summit to regulate OTC derivatives and analysis of the legal role of the Clearing and Settlement System under the Central Counterparty system. The course will also discuss the legal aspect of bond issuance, debenture, and how this could be applied to other financial products to generate what market generally refers to as securitisation. With the discussion of the Euro dollar bond, the course will discuss the application of US Securities Law. Securitisation will be analysed in terms of how it can be used to securitise all sort of financial contracts.

Teaching and Learning Methods

Lectures, workshops, autonomous learning groups and private study.  Use will be made of the Blackboard VLE to support learning in this module.

Assessment Methods

There will be a summative assessment, namely a choice of coursework questions. The word limit will be 5,000 words including footnotes. The emphasis in marking will be on research and analysis of the relevant field of law.