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Regulation of financial products and markets 406 (6 points)


Leader: Professor Dimity Kingsford-Smith

Clayton Second semester 2003 (Day)

Synopsis: Financial scandals and corporate greed (ENRON, WorldCom and HIH and One-Tel in Australia) have raised pressing questions of ethics in markets and also the sustainability of the international financial system. They have also raised questions of the effectiveness of financial regulation and regulatory agencies. In Australia, the Financial Reform Act 2001 is in the process of being implemented. It is the most thorough reform of financial regulation in the country's history. This option provides a timely analysis of the new law and regulatory policies. It does so in the context of studying the regulator (ASIC) the markets (ASX) and financial firms. Context is partly supplied by a visit, if possible, to the trading floor of a leading market intermediary. As well the course considers issues for investors and regulators in high tech internationalised markets, of which the Australian markets are part. It focuses on the nature of financial regulation and leading regulatory techniques e.g. disclosure, licensing, market misconduct, powers of investigation and enforcement. The course gives special attention to current regulatory problems and developing regulatory policy: market and regulatory convergence; protection of financial consumers; the tension between criminal law and more informal approaches to regulation; forces driving harmonisation of international and competing national systems; and the role of ethical arguments as justifications for regulation. Class attendance is three hours per week, two hours of lecture and one hour of interactive seminar. The materials for the course have been digitised and are available over the Web.

Assessment: Short written reports of market visit: 10% + prospectus due diligence exercise: 10% + Research essay (3000 words): 40% + Final examination (1 hour plus 30 minutes reading time): 40%

Contact Hours: Three hours of lectures per week

Prerequisites: LAW4171 or equivalent

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