week 3 Flashcards
regulatory techniques?
=> traditional ‘command and control’ regulation
=> ‘new governance’ regulatory techniques
- principles-based regulation
- meta-regulation
- enrollment of gatekeepers
- risk-based regulation
‘command and control’ regulation?
- ‘bright line rules’ which contain specific, often prescriptive and detailed, legal rules that leave little to no room for varying interpretation
- commonly backed by strict administrative or criminal sanctions overseen by a public authority (law as a threat)
strengths and weaknesses of ‘command and control’ regulation?
=> strengths:
- legal certainty for public regulator and regulatees
=> weaknesses:
- excessively prescriptive and detailed rules can be quickly outdated
- often aggressive enforcement
- creative compliance
- expensive
principles-based regulation?
- broad, general and purposive rules that may or may not be elaborated in further rules or guidance
- public regulators focus on ensuring that regulatees attain the purposes or outcomes of the regulation rather than technical compliance with detailed rules
strengths and weaknesses of principles-based regulation?
=> strengths:
- focus on ensuring that regulatees attain the purposes or outcomes of the regulation rather than technical compliance with detailed rules
=> weaknesses:
- ‘principles-based approach does not work with people who have no principles’
- considerable demands on the capacity of the public regulators and regulatees
meta-regulation?
- ‘management-based’ regulation which consciously relies on the internal management of firms to achieve the public goals set by the public regulator
- regulatees are required to develop their own systems to ensure compliance and to demonstrate that compliance to the public regulator
strengths and weaknesses of meta-regulation?
=> strengths:
- conscious reliance on internal management of firms
- greater flexibility in ensuring compliance
- giving legitimacy to market governance
=> weaknesses:
- internal systems and processes may be designed to achieve firm’s own goals rather than those of the public regulator
- over reliance on firms and public regulators
enrollment of gatekeepers?
public regulators involve others (commonly private actors) as gatekeepers to control whether the regulatees comply with regulatory requirements
strengths and weaknesses of enrollment of gatekeepers?
=> strengths:
- public regulators can enhance their regulatory capacity by leveraging off the control that they have over the regulatees
=> weaknesses:
- incentive structures of gatekeepers may not always be aligned with the regulatory goals
risk-based regulation?
public regulators systematically identify the different risks to their objectives and focus resources and regulatory effort on addressing most critical/serious risk
strengths and weaknesses risk-based regulation?
=> strengths:
- public regulators systematically focus resources and regulatory effort on addressing most critical risks
- risk-based frameworks provide a clear, well-articulated set of priorities
=> weaknesses:
- risks are often contested
- public regulators have to convey the image of being in control, while having to manage at once the conflicting demands of risks, resources and reputation (3 R’s)
how to effectively regulate unfair commercial practices in the EU?
=> determining the goal or outcome to be achieved
=> setting the standard of conduct required from market participants
=> choosing enforcement techniques
- public enforcement through administrative law means
- private enforcement through private law means
–> individual: individuals go to court
–> collective: representative bodies are entrusted to take representative actions against manufacturers on behalf of many customers that have suffered damage
functional approach of EU law?
- EU legislator’s task in market regulation => problem-solving
- distinction between public and private law =? not recognized as such
- public and private law => regulatory tools in novel combinations
- EU’s experimentation with regulatory tools in regulating the markets => led to emergence of legal hybrids
- legal hybrids combine elements of public and private law
multi-level system of governance?
- emphasis on supremacy of EU law
- EU law has supremacy over national => national law should comply with EU law
- interaction between EU and national law does not only include this vertical dimension (hierarchy), EU law also relies on national law to achieve its regulatory objectives
- dialogue between EU and national law (more horizontal dimension)
European regulatory private law?
- a body of secondary EU law which affects the relationships between private parties, regardless of the nature of the law (public or private) in which it has been transposed into the national legal order of a particular MS
- private law is used as an instrument of EU market integration
- implies and shows that private law can be used and has extensively been used as an instrument of EU market integration (public goal)
- European market integration: towards the establishment of the internal market for goods and services in the EU
- divergent national laws
- information asymmetry, imbalance of bargaining power between market participants
- purely national or purely international solutions do not suffice
European supervision private law?
- involves creation of a hybrid between public and private law, which is prompted by EU law
- in order to ensure that administrative sanction can be imposed, there is a supervisory authority which is entrusted to oversee the duty of care imposed on firms
- a body of regulatory conduct of business rules of EU origin, to be observed by firms when dealing with their (potential) clients, which forms part of a framework for public supervision over a specified market and it subject to public enforcement
- concerns relationship between a particular business and a public regulatory agency, but at the same time sets standards of conduct in the relationship between a regulated firm and its (potential) clients and aims to protect the latter
- regulatory in nature; ex-ante standard-setting by public authorities; development outside the traditional private law systems
EU supervision private law vs EU regulatory private law?
European Supervision Private Law is more about overseeing and ensuring compliance with existing rules in private law, while European Regulatory Private Law involves setting those rules and regulating the behavior of private actors to align with broader public and economic goals
Payment Services Directive?
- aims to protect consumers/users of payment services from possible abuses
- payment user protection
- authorization & operating conditions for PSPs/public supervision of PSPs
- ensuring balance between interest of PSP & consumer
- individual consumer redress
Markets in Financial Instruments Directive?
- investor protection
- authorization & operating conditions for ISPs/public supervision of ISPs
- no individual investor’s rights
- no private law remedies under EU law for aggrieved investors
- harmonizing effects on national contract and tort law vary across the EU
relationship between EU market regulation and national private law?
3 models:
- separation
- substitution
- complementarity
separation model?
EU regulatory private law rules form of national public law and exist separately from national private law rules
substitution model?
- EU regulatory private law duties become part of national public law and substitute pre-existing private law duties
- the latter may not impose additional stricter standards than the former, particularly in the case of maximum harmonization at EU level
complementarity model?
- EU regulatory private law rules form part of national public law, but nevertheless influence private law rules
- the latter may impose additional stricter standards than the former, regardless of the harmonization degree at EU level
