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Unit information: Regulation of Financial Markets and Institutions in 2015/16

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Unit name Regulation of Financial Markets and Institutions
Unit code LAWD39005
Credit points 20
Level of study H/6
Teaching block(s) Teaching Block 4 (weeks 1-24)
Unit director Professor. McVea
Open unit status Not open

LAWD10008 Law of Contract or LAWD10007 Foundations of Business Law



School/department University of Bristol Law School
Faculty Faculty of Social Sciences and Law


Recent events globally and nationally have placed financial markets and financial market regulation under intense scrutiny. In the UK, government bailouts of major financial institutions and the ongoing de facto nationalization of “too big to fail” elements of the entire financial sector, have been the impetus for significant structural reform of the UK’s regulatory architecture. Similar difficulties within the EU have led to equally dramatic reform of the EU’s regulatory architecture as it relates to the financial sector.

The origins of these events – which can be traced back to the implosion of the US sub-prime mortgage market – have threatened to de-stabilise the economic well-being of many otherwise healthy economies and to plunge the world into a global downtown.

Set against this background, the unit covers a selection of topics in financial markets law mainly, though not solely, in relation to securities regulation (rather than the regulation of high street banking or insurance business). The focus is on the public aspects of regulation (such as the role, rule-making and enforcement powers, and accountability of the major regulatory agencies) rather than on the private law rules (such as tort, contract etc), or on the transactional aspects of financial arrangements (such as warranties, pledges, repypothecation etc). Although the unit focuses on the regulation of UK financial markets and institutions, it does so in the context of relevant EU law and emerging international norms and initiatives.

Topics covered include: nature and function(s) of financial services; justifications for and methods of regulation; the European Dimension—Financial Services Action Plan (FSAP), the Lamfalussy process, the EU’s new financial architecture post the de Larosiere Report; the UK’s regulatory framework as established by the Financial Services and Markets Act 2000 (as amended) – the “death” of the “single regulator” and the “birth” of a new “twin peaks” architectural framework; the powers and responsibilities of the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA), and the means by which they are rendered accountability; “judgment led” regulation and “principles based/outcomes focused” regulation; investor compensation and investor complaints; the public distribution of securities (so-called “public issues”); market abuses—especially insider dealing and market manipulation; conflicts of interest in diversified financial institutions; banking reform in the wake of the Vickers Report.

The unit will be of particular interest to those who wish to work in a financial centre whether as a solicitor, barrister, banker, journalist or regulator. Although a prior understanding/ appreciation of basic economic concepts may prove helpful, it is by no means essential.

The unit will complement students Banking law and possibly those studying Company law or Corporate Governance.

Intended learning outcomes

By the end of this unit a successful student will be able to:

  • When presented with a set of facts:
    • identify the key regulatory issues arising from those facts
    • cite relevant case law and/or statutory authority
    • explain how that authority applies to the issues raised by the facts, or how the facts may be distinguished
    • draw reasoned conclusions
  • When presented with a proposition on a particular aspect of financial services law:
    • present arguments for and against the proposition, citing relevant authorities as well as the views of other writers, and be able to assess the weight and credibility of any argument advanced
    • examine relevant reform proposals
    • draw reasoned conclusions as to whether you agree or disagree with the proposition advanced

Teaching details

Ten one-hour lectures and ten two-hour seminars.

Assessment Details

Formative assessment: mandatory midsessional exam (90 minutes – 2 Qs); students will have the opportunity to submit one further formative essay.

Summative assessment: 3 hour unseen exam - 100%

The examination includes both problem type and essay type questions (though mainly essays), designed to assess both whether students are able to understand and apply the law across the breadth of the syllabus, and whether they are able to think critically about it. The assessments will assess all of the intended learning outcomes for this unit.

Reading and References

There is simply no suitable book which addresses all or even the bulk of the issues covered in the unit and which is not either under-inclusive or over inclusive. In so far as there is a suitable book, the best is A Hudson, The Law of Finance (2nd edn Sweet & Maxwell, 2013).

Students are referred to a range of material, mostly via the University’s online resources (eg Westlaw/Heinonline etc)