Financial Services Regulation Research Articles

Institutional model of the financial services market and its development

In the paper, the institutional model of the financial services market in Ukraine is defined as a complex system that ensures the interaction of its various subjects, regulates their activities and contributes to the stable and effective functioning of the financial sector based on taking into account the role and relationships of public and private organizations, legal and regulatory frameworks, as well as socio-economic factors that affect the functioning of the financial services market. Three stages of the development of the financial services market in Ukraine are highlighted, their characteristics, achievements and challenges are given. The main components of the institutional model of the financial services market are defined. It is shown that high-quality infrastructure and effective debt settlement institutions are critical for maintaining the financial stability of credit institutions. The purpose of the reform of state regulation based on the model of a single regulator is determined, which consists in increasing the efficiency, transparency and stability of the financial market. The advantages of a single regulator based on the NBU are: consolidation of functions, improvement of efficiency, reduction of administrative costs, improvement of coordination, increase of transparency, reduction of duplication. The challenges are: the difficulties of the transition period, the need to maintain specialization and the implementation of management changes. It is shown that the financial ombudsman plays an important role in the system of institutions for professional regulation of financial services markets. At the initial stage of implementation of the said institute, its role as a mediator is critically important for creating an effective mechanism for resolving conflicts and ensuring trust in the financial market. It has been established that the financial ombudsman performs the functions of: an independent mediator based on the principles of neutrality and confidentiality; supports the resolution of conflicts based on the analysis of the situation and the proposal of solutions, improves communication by organizing meetings and ensuring a clear exchange of information; ensures transparency and fairness by clarifying rights and obligations, creating standards for mediation; increases confidence in the financial market on the basis of reducing conflicts and improving the reputation of the financial market.

Implementation of Carbon Trading: Mechanisms of Execution and Legal Protection for Shareholders on the Indonesia Carbon Exchange

This research aims to find out how the trading mechanism on the carbon exchange and legal protection for company shareholders in carbon trading transactions on the Indonesian carbon exchange. Increased global awareness of climate change has prompted many countries, including Indonesia, to adopt more effective mitigation measures. A carbon exchange is a platform for buying and selling carbon credits, which can be obtained by companies that have taken decarbonisation measures. Through carbon trading, investors can be involved in reducing carbon emissions through a scheme that has been provided, namely emission trading or emission offsets. The Indonesian government issued carbon trading regulations and policies as an effort to reduce greenhouse gas emissions globally, and the presence of the Indonesian Carbon Exchange (IDX Carbon) provides positive sentiment for a number of issuers engaged in the environmentally friendly sector. This is because the presence of a carbon exchange opens up opportunities for environmentally friendly companies to increase their revenue by selling carbon credits. The method used in this research is normative juridical with statutory approach and conceptual approach. The results of this research show that shareholders of carbon exchange organisers can only be owned by sui generis institutions, Indonesian citizens, Indonesian legal entities, and/or foreign legal entities that have obtained permission or are under the supervision of the financial services regulator in their home country. In addition, members of the board of directors of the carbon exchange organiser must be domiciled in Indonesia.

Purpose and principles of state regulation of non-bank financial services markets

The need for stable development and effective use of non-banking financial services market tools, as well as the imperfection of the current legislation in this area characterize the unconditional relevance of the topic of this article. The purpose of the article is to determine the purpose of state regulation of non-bank financial services markets, to define the concept of the principles of state regulation of professional financial activity, and to highlight and analyze the main principles of such regulation. It is noted that one of the main elements of state regulation of non-bank financial services markets is the purpose of such regulation. In view of the analyzed scientific positions and legislative provisions, it is concluded that the main goal of state regulation of non-banking financial services markets is: 1) ensuring transparency, reliability and openness in the markets of non-banking financial services; 2) coordination of activities of state authorities on the functioning of non-bank financial services markets; 3) protection of rights, legitimate interests and satisfaction of socio-economic needs of consumers of non-banking financial services; 4) prevention of abuses and violations in the markets of non-banking financial services. It is proposed to define the principles of state regulation of professional financial activity as the main ideas, basic principles, and general provisions of the implementation by the Regulators of a set of measures to regulate, control and supervise the activities of non-banking organizations and other participants in the markets of non-banking financial services in order to create favorable conditions for their functioning. , preventing and countering abuses and violations in the markets of non-banking financial services and ensuring the protection of the legitimate interests of clients. The main principles of state regulation of professional financial activity are highlighted: the principle of legality; principle of commensurability (proportionality); the principle of guaranteeing the rights and legitimate interests of participants in the financial services market (in particular, the rights of consumers); the principle of assessment by the Regulators of transactions, operations, circumstances and events taking into account their economic and factual content; the principle of mandatory licensing of professional financial activity; the principle of exclusivity of professional financial activity.

Locked out of banking: The limits of financial inclusion for formerly incarcerated individuals

Using data from the 1979 and 1997 National Longitudinal Surveys of Youth (NLSY), this study investigates the relationship between criminal justice system contact history, particularly incarceration, and being excluded from the financial system. Individual fixed effects estimates show that people who have been incarcerated have a lower likelihood of having a checking or savings account after incarceration. While this association could be due to justice-involved individuals avoiding formal systems like financial services, there is no evidence of a relationship between arrest history and being unbanked. Even adjusted for age and other factors, formerly incarcerated people are more likely to be unbanked in the years after release than before being incarcerated. This study offers further evidence on the challenges facing formerly incarcerated individuals, as well as for banking and financial services regulators seeking to expand financial inclusion efforts in the U.S.

Fintech: Digital Transformation of Financial Services and Financial Regulation

This study offers a comprehensive analysis of critical aspects within the domains of financial technology (Fintech) and online payments, with a focal point on the regulatory dimension. It commences by exploring how Fintech, propelled by technological innovations, has orchestrated a paradigm shift, ushering in the digital economy and digital civilization. It underscores Fintech's role in mitigating longstanding issues in traditional finance, particularly information asymmetry and high-risk premiums, harnessing the potential of big data, cloud computing, blockchain, and artificial intelligence. The study extends to a detailed evaluation of the intelligent investment advisory sector (Robo-Advisor) and online payments, delving into security concerns and regulatory considerations. A pivotal highlight is the transformative potential of digital currencies, including central bank digital currencies (CBDCs) and cryptocurrencies, in revamping payment systems, fortifying security, and reducing cross-border transaction costs. Regulatory upgrades play a paramount role in shaping this transformation, ensuring the security of online payments and fostering compliance.

Aceh as a Model of Halal Trade in Financial Goods and Services Regulation based on Pancasila within the Framework of National Law in Indonesia

The province of Aceh holds a special autonomy status, which allows Aceh to possess the jurisdiction to enforce the Islamic law specifically in the realm of the civil law, particularly in matters related to commerce. In Aceh, trading in commodities and financial services must adhere to the principles of the Islamic law, ensuring that only halal goods are involved. Using the Content Analysis Techique, this study adopts a combined approach of the national law and the Islamic law. The data was gathered by literature and document analysis, including an examination of legal statutes, scholarly publications, and relevant books pertaining to the topic being discussed. This study asserts that the trading of halal commodities and financial services are fundamental aspects of the Islamic law, a concept that is unfamiliar in legal frameworks rooted in the Western civil law systems. Consuming food that is not halal and engaging in usury are both forbidden under the Islamic law. Within the framework of sharia, commerce is not just confined to individuals, but can also be subject to public scrutiny if they contravene fiqh, so rendering them impermissible. In order to achieve this legislative objective, the Aceh Province established a regulatory framework in the form of the Aceh Qanun, in line with the authority granted by Article 125 of Law Number 11 of 2006. This model has facilitated the emergence of a trade system that is devoid of any forbidden aspects, and financial services that are free from the practice of charging excessive interest, in accordance with Sharia principles. As a result, it differs from the conventional practices of trading goods and services that are prevalent within Indonesia. It is important to highlight that both Pancasila and National law ensure the freedom of citizens' rights to practice the Islamic law, including engaging in halal trade of commodities and financial services.

2023. Securities and Financial Services Regulation

2023. Securities and Financial Services Regulation

The transnational and the local in the comparative law of finance: technics, politics, and the functions of commercial law

ABSTRACT In the absence of a global regulator, transnational financial law emerges from the combination of national laws and the contractual practices developed by networks of private, public and hybrid private-public actors who contribute to the engineering and (self-)regulation of financial services largely through contracts. The theoretical question arises whether the process of transnationalisation might determine the dominance of economic rationality over other considerations, and whether a possible nationalisation of the transnational might instead produce a repoliticisation of the economic. Against this background, the article focuses on some of the instruments of transnational financial self-regulation, and considers how these interact ambivalently with local laws and judicial practices. By looking at the role of private law institutions and considering national litigation over financial contracts in different jurisdictions, the article reveals tensions between different objectives, ultimately raising questions about the function of commercial law both within and beyond the state.

Basis for the Establishment of the Financial Services Authority (OJK) as Regulator and Supervisor of Financial Services in Banjarmasin

Continuous and stable supervision can be carried out by an independent institution such as Bank Indonesia or the Financial Services Authority. The basis for establishing the Financial Services Authority considers various aspects, especially technological aspects, where growth and development as well as financial service systems are increasingly needed by the public quickly and precisely. With the birth of the Financial Services Authority, regulation and supervision of financial service institutions can be easily carried out through one door, remembering that financial service institutions are not only banks but also non-bank financial service institutions and capital markets. With the formation of the OJK, it is hoped that it can support the interests of the financial services sector as a whole and increase the competitiveness of financial services institutions themselves in making contributions to national development.

Pelatihan Kepatuhan Koperasi Terhadap Penyelenggaraan Pengembangan dan Penguatan Sektor Keuangan

Law Number 4 of 2023 concerning the Development and Strengthening of the Financial Services Sector (UU PPSK) is the initiative of the Government and the DPR to advance public welfare by reforming the Indonesian financial sector. Compromises for Savings and Loans (KSP) and Savings and Loan Units (USP) operations are divided into closed loops where KSP and USP are supervised by the Ministry of Cooperatives and of course, internal cooperatives and opened loop for KSP and given a two-year transition period to become a Financial Services Cooperative supervised by the Financial Services Authority (OJK). This study recommends that the regulation and supervision of cooperative savings and loan business activities be more suitable for the Government on the grounds of the context of cooperative development, democracy, social inclusion, local culture, history, regulation, and taking into account lessons learned experiences of other countries in developing cooperatives. While the regulation and supervision of financial services businesses by cooperatives is more suitable to be supervised by the OJK on the grounds that financial service cooperatives can raise public funds and protect consumers who use financial services. The PPSK Bill contains a number of articles on technical matters that should be sufficiently regulated in the PP. The PPSK Bill needs to accommodate the voices and aspirations of the cooperative movement aimed at encouraging the growth of supporting institutions needed by KSP/USP and Financial Services Cooperatives. Methods Training is carried out using a participatory method that allows participants to interact directly with the trainers/instructors

How Should Crypto Lending Be Regulated Under EU Law?

The collapse of Genesis is the latest in a cascade of failures of crypto lenders. The last year has seen numerous major crypto lenders, such as Celsius, Voyager and BlockFi, going out of business in domino-like fashion. The failures have revealed the vulnerabilities of crypto-market lenders’ business model, most notably the liquidity and maturity mismatches in their loan portfolios, and their markedly weak corporate governance. The present article explores avenues to regulate crypto lending within the framework of EU financial services regulation. It argues that crypto lenders should be taken as falling within the definition of credit institutions under EU law, and thus, as a result, should be subject to the stringent licensing and prudential requirements introduced by the Capital Requirements Directive and Regulation. Prudential regulation is one of the ways that have been suggested for the regulation of crypto-market operators, alongside the investor protection framework. Taking into account that crypto lenders easily operate on a cross-border basis and that prudential regulation is fully harmonized in the EU, we take an EU-wide perspective and focus our analysis on EU law, rather than member state laws. In addition, prudential regulation can deal with any systemic risk issues with which investor protection regulation cannot deal. However, in order to avoid moral hazard and not give investors the false impression that crypto lenders are safe too-big-to fail institutions, we suggest that crypto lenders should not enjoy the full protection of prudential regulations. In particular, they should not be offered lender of last resort support and they should not be allowed to subscribe into a deposit insurance scheme. Even though it is often said that crypto markets pose no risk to the regulated sector due to limited interconnectedness, it should be noted that due to the high leverage of crypto investors, the real risk to the regulated sector comes from the possibility of crypto investors massively liquidating their positions in other asset markets.

The Effect of Financial Services Authority Regulatory Implementation Concerning Financial Consumer Protection on Banking Financial Performance

Many parties engage in banking as the financial services industry grows, particularly in Indonesia. To keep banks safe, financial services must emphasize customer protection. The Financial Services Authority (OJK), Indonesia's financial services regulator, implemented several consumer protection measures. The policy may hurt banks despite protecting customers. Consumer protection laws strengthen banks. Proper protection would make clients feel safer and increase bank trust. Banks with strong consumer protection regulations will attract more clients since customers will feel safe doing so. This study examines how the OJK regulation's implementation on financial services consumer protection affected national commercial banks' financial performance from 2017 to 2021. This study adopts descriptive and verifiative approaches to analyze 93 national commercial banks in Indonesia from 2017 to 2021. The research utilizes secondary data from the Financial Services Authority (OJK) and bank financial statements. The investigations done have led to the conclusion that implementing consumer protection can improve bank financial performance and lower credit risk

MOBILE BANKING IN BANGLADESH: A POLICY AND REGULATORY REVIEW

Policy and regulatory issues are indispensable for maintaining discipline and protecting the interests of all stakeholders in the mobile banking ecosystem. Bangladesh Bank has issued mobile banking policy guidelines (2011) and mobile financial services regulation (2018) to protect against abuse of these services like financial fraud, money laundering, and terrorist financing, as well as safeguard user funds. This article examined the role of mobile banking policy and the regulatory framework in creating a favourable regulatory environment for mobile banking in Bangladesh. For this purpose, twenty-three KIIs and one questionnaire survey were conducted on 400 respondents in the country's four districts. Many public and private documents and journal articles were also reviewed. A regulatory policy index for mobile banking with ten indicators was developed, and the overall regulatory index score was 0.85 out of 1. Multiple linear regression analysis has also been used in this study. Its regulatory index value, beta coefficient, and R-value, as well as expert opinions, asserted that mobile banking regulatory policy standards have positively influenced the creation of a favourable regulatory environment, even though they demand some modification in terms of account opening minimum age, service charge rate, product diversification, interoperability, and supervision of mobile banking activities. Since multiple agencies are involved in mobile banking policy and regulation, the government can play a vital role in coordination among the multiple agencies to ensure the protection of customers and financial steadiness through a suitable legal structure.

Central bank digital currencies as an element of the payment-centric model of global financial regulation

The article examines the current state of implementation of one of the largest regulatory projects in to examine the role of international cross-border payment regulation in the context of global financial architecture and to see how a modernized national payment infrastructure could be optimally embedded in the global payment infrastructure. To achieve this purpose, this article systematizes the standard setting documents and analyzes doctrinal sources. Special attention is paid to BIS Innovation Hub projects. The study analyses area E of the G20 Roadmap, which covers the development of new means of payment, including CBDCs and stablecoins. In particular, the paper provides an overview of analytics and specific projects pertaining to the introduction of central bank digital currencies (CBDC). The article also analyzes how the issuance of CBDCs relates to the international framework being created for regulating crypto assets. The authors conclude that global financial regulation is becoming more payment-centric since the issue of regulating cross-border payments lies at the intersection of several important policies and international legal regimes. In particular, this involves international policies pertaining to the regulation of financial services, macroprudential regulation, regulation of the global monetary system, regulation of crypto assets, countering illicit financial flows in the global economy, and ESG regulation. The article systematizes the features and risks of the payment-centric model for global financial regulation. It concludes that international cooperation and coordination are necessary if cross-border projects related to payments are to be successfully implemented.

Perananan Lembaga Otoritas Jasa Keuangan Dalam Mengawasi Sistem Keuangan Islam Di Indonesia

The financial system is a system where this is very important so that it has a principal value role in running the economy in life. The financial system can also be interpreted as an economic order that exists in a country that has an important role and carries out all activities regarding various financial services where this is carried out by the financial institutions themselves, which have the main task and role of channeling funds. However, with the increasingly complex situation of the global financial system, an institution is needed which has a duty and role to carry out an arrangement and carry out supervision. The presence of the Financial Services Authority institution in the financial system in Indonesia makes finance in Indonesia increasingly well-conditioned. This is in accordance with the objectives of the Financial Services Authority, which is to serve as a supervisory body for the running of the financial system in Indonesia. The role of the Financial Services Authority (OJK) in overseeing the financial system in Indonesia is implemented through the Role of the Financial Services Authority in Consumer Protection and Conducting Investigations and the Role of the Financial Services Authority in Regulation and Supervision of Technology-Based Financial Services. Thus, in developments in the financial sector in Indonesia, the presence of OJK is considered capable as an institution to carry out supervision which is expected to be able to bridge the gap to help launch several activities of financial service institutions.

2022. Securities and Financial Services Regulation

2022. Securities and Financial Services Regulation

The role of ombudsman: Resolving financial disputes in Malaysia

AbstractThe paper highlights the establishment of the Ombudsman for Financial Services (OFS) in Malaysia as a good alternative avenue for the equitable settlement of disputes regarding financial services. It has been operating since 2016. However, its accessibility to reach wider financial consumers is restricted due to its limited monetary jurisdiction which is incompatible with the current market conditions. Adopting a qualitative content analysis approach, this study reviews the primary legal framework for implementing the financial ombudsman scheme in Malaysia under Financial Service Act 2013 (FSA), Islamic Financial Service Act 2013 (IFSA), Financial Services (Financial Ombudsman Scheme) Regulations 2015 and Islamic Financial Services (Financial Ombudsman Scheme) Regulations 2015 with special focus on monetary jurisdiction. The study has also analyses the jurisdiction of other countries, and the results found that the monetary jurisdiction of the law in Malaysia is still small and limited. Based on comparative analysis, this study suggests an agile approach in determining the monetary jurisdiction through a flexible provision allowing a review every 3 years based on the consumer price index and relevant reports. This way, its accessibility to wider financial disputes will be elevated.

Problems of Legal Regulation of Financial Services in the Context of Brexit

The financial services sector is an important contributor to the United Kingdoms (UKs) economy. The article discusses the main problems that arose in this sector as a result of Brexit. The European Union (EU)-UK Trade and Cooperation Agreement that was concluded as a result of Brexit does not contain special rules regarding financial services, thereby adding risks to the financial stability of the parties, while the existing international acts of soft law do not fill the existing gap. Consequently, the access of British financial services to the EU Common Market is possible only on the basis of recognition of the equivalence of the British regulatory regime to that of the EU. Meanwhile, such a decision has not yet been made and is unlikely to be made in the near future. Equivalence promotes the convergence of the two legal orders, providing a reduced uncertainty in the regulation of financial services. It was concluded that in the context of the goals of the UKs withdrawal from the EU and the intentions of the British government to return regulatory powers, the lack of a clear international legal mechanism for cooperation between the UK and EU in the field of financial services regulation will contribute to increasing divergence in legal regulation within both legal orders. This may also increase barriers to cross-border trade in financial services. The methodological bases of the work were the well-known general and particular methods of scientific research. The article aimed to study the relevant problems of legal regulation of financial services in the context of the UKs withdrawal from the EU, and identify general trends as well as the essential characteristics and main features in the field.

PENGATURAN HUKUM PERSAINGAN USAHA ATAS JASA KEUANGAN DIGITAL DI INDONESIA

The revolution from industry 4.0 has created a new finding in the financial sector, namely digital finance. The unclear legal rules governing business competition in the digital financial services industry can lead to cartel actions in conducting business competition. The method used in writing this article is normative legal research on the phenomenon of the development of the digital financial era in Indonesia. This study aims to analyze the legal regulation of business competition for digital financial services and fair business competition in the digital financial services industry. The regulation of digital financial services in Indonesia is regulated in Bank Indonesia Regulation Number 19/12/PBI/2017 concerning the Application of Financial Technology, and is also regulated in the Financial Services Authority Regulation No. 13 /POJK.02/2018 regarding digital financial innovation, it also includes consumer protection for digital financial service users. However, to guarantee legal certainty for the community or consumers, it must be regulated in the form of a law.

Administrative and legal regulation of the provision of financial services in Ukraine: a comparative aspect

The formation of an appropriate mechanism of administrative and legal regulation of services in the field of financing was carried out at each stage of its development by annually expanding the theoretical (legislative and doctrinal-scientific) and practical basis, providing greater opportunities for consumers to exercise their rights to prompt and prompt service. To date, the topic studied by the authors is one of the most developed in Ukraine. The article analyzes the possibility of formulating a quality mechanism of administrative and legal regulation of financial services in Ukraine through the prism of European integration processes and preventive measures. An extensive analysis of the current financial system of Ukraine is given. The administrative-legal, informational and anti-corruption components of the regulation of financial services are highlighted. It was also found that an important new form of incentive funding for the regions were competitions for budget subventions for the achievement of achievements, rather than their absolute level, which allows them to participate effectively in depressed regions. The strategy of development of the Ukrainian financial market is aimed at its transformation into the main mechanism for attracting investment by Ukrainian companies, creating conditions for effective investment of private and pension savings. The authors revealed the steps and stages of establishing the procedure for providing financial services in terms of such an integral principle of the modern formation of the process of providing services in Ukraine as the principle of service. As a result of the study, in addition to the classic administrative component of financial services, information and anti-corruption services were singled out. The general and special jurisdiction for committing offenses in the field of regulation of financial services at the level of bylaws of Ukraine is analyzed.