Programmes

International Financial Law

  • Summer schools
  • Department of Law
  • Application code SS-LL206
  • Starting 2020
  • Short course: Closed
  • Location: Houghton Street, London

UPDATE: Due to the global COVID-19 pandemic we will no longer be offering this course in summer 2020. Please check our latest news on this situation here.

This course offers a cross-sectoral analysis covering financial market transactions in commercial banking, insurance, derivatives, capital markets and asset management.

It allows participants to grasp the big picture of the legal underpinnings of financial transactions and to understand how risk in the financial market is entered, managed, dispersed and shifted. 

The course analyses and compares the legal basis of financial transactions in both Common law and Civil law jurisdictions. The focus is mainly on broad principles and policy issues rather than a detailed examination of statute, case law and drafting in order to allow students from all jurisdictions to take home valuable knowledge directly applicable to their respective jurisdictions.

This course is designed to be of both high academic and direct practical value. It appeals to students preparing for a career in financial markets as well as to practitioners wishing to broaden their horizon. It will be of particular interest for the

  • Private financial sector (management, compliance, legal, governmental and international affairs, etc)
  • Legal practice specialising in the above mentioned activities
  • Government and governmental agencies (policy makers from treasuries, ministries of economy/finance/justice, foreign office, etc.)
  • Central banks (management, legal, regulation and oversight, international affairs, etc.)
  • International organisation and EU organs and agencies (policy makers, strategy, legal, international affairs, etc.)
  • Non-governmental organisations and advocacy groups active in the field of international financial markets
  • Students interested in any of the above, or pursuing a masters programme related to financial markets

This course is a good match with LL207 International Financial Regulation, which concerns the public law side of financial markets. In combination these courses provide for the full picture of financial markets law and regulation. However, both courses are self-contained.


Session: One
Dates: 22 June – 10 July 2020
Lecturer: Dr Philipp Paech


 

Programme details

Key facts

Level: 200 level. Read more information on levels in our FAQs

Fees:  Please see Fees and payments

Lectures: 36 hours 

Classes: 18 hours

Assessment*: One examination and one essay

Typical credit**: 3-4 credits (US) 7.5 ECTS points (EU)


*Assessment is optional

**You will need to check with your home institution

For more information on exams and credit, read Teaching and assessment

Prerequisites

Introduction to legal methods or equivalent.

No specific knowledge of financial markets is required, see Reading materials (below) for a good introduction. However, students from other disciplines need to familiarise with a number of fundamental concepts, such as property, contract and insolvency, before joining the course.

Programme structure

Introduction to financial law

  • What is the financial market?
  • The legal side of the financial market
  • The regulatory side of the financial market
  • Overview of types of financial transactions
  • National, EU and international law

Creating risk - Raising capital

  • The nature and business of banks
  • A bank’s balance sheet
  • Loans and interest
  • Deposit taking
  • Syndicated loans

Creating risk II and risk transfer

  • Issuance of Shares (Equity)
  • Issuance of Bonds (Debt)
  • Issuance of International Bonds (Eurobonds)
  • Assignment
  • Novation
  • Other transfer alternatives

Risk mitigation I – Security interests

  • Security interests: pledge, mortgage, fix and floating charge
  • Quasi-security: title-transfer
  • Distinction between fix and floating charge under English law

Risk mitigation II – Financial collateral

  • Financial collateral
  • Substitution, margining, right of use
  • Legal advantages and drawbacks
  • EU and national legislation
  • Securities lending and repurchase agreements

Risk mitigation III – Personal surety, derivatives

  • Guarantee and indemnity
  • Insurance
  • Futures, options, swaps
  • Credit default swaps
  • Recharacterisation risk
  • Standard market documentation (ISDA, GMRA, LMA)

Risk mitigation IV – Set off, netting and clearing

  • Basic bilateral mechanism: set off, settlement netting, close-out netting
  • Importance for monetary operations, derivatives, repos, securities lending
  • Close-out netting and insolvency principles
  • Multilateral clearing and central counterparty clearing

Securitisation and Asset-backed securities

  • Structured finance
  • Asset-backed securities
  • True sale securitisation
  • Synthetic securitisation
  • The role of rating agencies and investment banks
  • Legal risks

Internationalisation of the Market

  • Cross-border financial services, branches and subsidiaries
  • Insolvency of multinational financial institutions
  • Territorialism and Universalism
  • Conflict of laws: Lex rei sitae, lex societatis, lex situs, lex contractus, PRIMA
  • Choice of law and the global influence of English law

Transfer of financial instruments

  • Stock exchanges – trading of securities
  • Clearing organisations – settling the trade
  • Domestic holding and transfer of securities
  • International holding and transfer of securities
  • Derivatives clearing

Crypto assets in FinTech

  • Manifestations (such as Bitcoin) and taxonomy
  • Delimitation from traditional assets: distributed creation and holding networks
  • ‘Code is Law’
  • Policy axioms for a progressive legal framework
  • Domestic legal analysis vs international approach

Financial sector insolvency – a special area of law?

  • Safe harbour protection of financial institutions
  • The tension between contract law and insolvency law
  • Effects on systemic risk and liquidity
  • Internationalisation on the basis of master agreements

Course outcomes

  • Understand how risk is created and managed by using different types of legal arrangements.
  • Get to know the difficulties in making these arrangements insolvency proof and robust in times of financial crisis.
  • Understand the legal difficulties that flow from the international character of the financial market.

 

Teaching

LSE’s Law Department is one of the world’s best. In the UK, it was ranked first for research outputs in the most recent Research Excellence Framework (REF) and in the top 5 law departments overall by The Complete University Guide in 2018. In the 2017 QS World University rankings, the Department was ranked seventh (out of 200 departments worldwide).

Many important subjects were first taught and examined systematically from an academic perspective in LSE’s Department of Law. We pioneered the study of banking law, taxation law, civil litigation, company law, labour law, family law, aspects of welfare law, and studies of the legal system and the legal profession, and continue to be the leading thinkers in our field.

On this three-week intensive programme, you will engage with and learn from full-time lecturers from the LSE’s law faculty.

Reading materials

There are two texts which will be used for many of the sessions. There are a number of copies available at the LSE Library. Students might also consider purchasing one or the other. 

P. Wood, Law and Practice of International Finance, Sweet & Maxwell, 2008 (ca. £40,  soft bound). This book is the first building block of the Basic Reading.

S. Valdez, Ph. Molyneux, An Introduction to Global Financial Markets, 8th ed. (7th and 6th can also be used, but not older), Palgrave-McMillan 2015, ca. £30. This book is mainly on the market practice and therefore recommended to those without prior knowledge in financial markets. It is not a law book and hence needs to be used together with P. Wood, above.

*A more detailed reading list will be supplied prior to the start of the programme

**Course content, faculty and dates may be subject to change without prior notice

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How to Apply

Related Programmes

International Financial Regulation

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Corporate Finance Law

Code(s) SS-LL301

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