Abstract The rapid evolution of cryptoassets, including stablecoins, and the potential introduction of a retail central bank digital currency, has prompted regulators to revisit anti-money laundering and combating the financing of terrorism (AML/CFT) frameworks for payment instruments. This article develops a conceptual framework for evaluating how AML/CFT rules may affect payment instrument choice. It focuses on the role of intermediaries, privacy-integrity trade-offs, and the risk of regulatory arbitrage. The evolution of the European Union’s regulatory framework is used as the principal case study due to its comprehensive scope. With a series of regulatory reforms, it addresses a wide range of payment instruments, including cash, e-money, commercial bank deposits, cryptoassets and the proposed digital euro within a single regulatory framework. This article argues that uneven AML/CFT requirements across payment instruments may incentivize shifts between payment instruments—a possible ‘waterbed effect’—which warrants further empirical analysis. Lessons from the case study also underscore the unique challenges posed by self-hosted cryptoasset wallets, as they raise questions about technical traceability, legal enforceability, and the effectiveness of supervision. The article concludes that a consistent AML/CFT approach ideally combines overarching principles (‘lex generalis’) with tailored instrument-specific measures (‘lex specialis’), while remaining flexible enough to adapt to future innovations.
Abstract This study examines stewardship disclosures when institutional investors retain discretion over their content. Disclosure economics, signalling theory, and institutional theory predict that discretionary disclosure frameworks create incentives for investors to provide low-cost symbolic disclosures while underproducing more costly information that identifies genuine stewardship practices. This prediction is tested using a unique dataset of stewardship disclosures by 146 institutional investors operating under Japan’s consistently discretionary stewardship framework. Analysing 438 investor–year observations from 2017, 2021, and 2025, the study finds that stewardship disclosures increased substantially, yet that growth was greater for soft disclosures describing policies and intentions rather than hard disclosures evidencing stewardship infrastructure and activity. The findings suggest that specifying disclosure content is a consequential feature of stewardship regulation.
This article examines how non-standard terms are produced in non-cleared OTC derivatives documented on the ISDA Framework. Although ISDA documentation is widely treated as a paradigm of contractual standardization, market participants routinely amend, supplement, replace, and avoid standard terms. The article draws on qualitative interviews with private practice lawyers, in-house counsel, and traders, plus documentary analysis to make two contributions. First, in extending the scholarship on the production of complex financial contracts, the article argues that deviations from standard terms are often deliberate institutional outputs. Second, the granular customization observed in the production process suggests that NC OTC derivatives on the ISDA Framework are better understood as customized instruments despite standardization. The practical implication is that ISDA's role should evolve from standardizing terms alone to coordinating predictable forms of nonstandardization. Through the law and economics insight that private institutions can coordinate the reduction of sub-optimal terms, ISDA's coordination of non-standardization can proceed without suppressing the flexibility non-standardization provides.
Abstract The choice of governing law and jurisdiction in international sovereign bond contracts has traditionally been anchored in the well-established legal frameworks of New York and England. However, recent legislative proposals in both jurisdictions have prompted market participants to consider alternative governing law options. This article examines a new contractual response: the ‘Flip Clause’, first introduced in the debt restructurings of Suriname (December 2023) and Sri Lanka (December 2024). Flip Clauses grant investors the right to change the governing law and jurisdiction of their bonds to a pre-determined alternative—from New York law to English law, and subsequently to Delaware law—should developments in the originally selected jurisdiction warrant such a change. By embedding this optionality directly within bond structures, these clauses expand the range of available governing law frameworks. A key innovation lies in the clauses’ treatment as a non-reserved matter when initiated by investors, requiring only 20% of holders to trigger a consent solicitation and approval by 66⅔% (or 75% at a quorate meeting); lower than the thresholds applicable to issuer-initiated modifications under standard collective action clauses. This asymmetry provides flexibility for investors while preserving market access for the sovereign. The Flip Clause reflects the sovereign debt market’s capacity for contractual adaptation in response to evolving legislative landscapes, offering a framework that may inform future bond documentation as jurisdictions seek to position themselves as attractive alternatives for sovereign bond issuances.
Abstract The UK’s financial collateral regime is of great importance to the financial markets, enabling the speedy creation and enforcement of security interests over financial assets, often on a cross-border basis. This brings benefits in terms of liquidity and lower-cost financing for investors, ultimately reducing the cost of capital for the real economy. Many financial assets are actively traded, circulating pools of assets, such as investment portfolios, where the most appropriate form of security under English law is the floating charge. The advent and rapid growth of digital assets expose existing fault lines in the law of financial collateral, which should be addressed in any review of the law in this area. This article proposes an analytical framework based on three interconnected problems: mixed-category portfolio composition, variable patterns of control, and dynamic portfolio adjustment. Applying this framework, the article evaluates the scope of key safeguards for secured creditors and argues that the requirement for ‘control’ of collateral under English law should be reformed.
