• ICOs with trustworthy-looking teams attract significantly more funding. • Facial trustworthiness is unrelated to post-ICO performance, revealing biases. • Individual investors are more prone to biases than institutional investors. • The results highlight the need for regulations in unregulated fundraising markets. Investor protection regulations, such as the Securities and Exchange Commission’s prohibition on general solicitation, aim to prevent individual investors from being misled by marketing. However, their impact on investor behavior remains unclear. This study examines the Initial Coin Offering (ICO) market, an unregulated setting in which issuers freely advertise projects without standardized disclosures. In the absence of reliable financial information, investors may rely on alternative cues, such as ICO team members’ perceived facial trustworthiness. Using machine learning–based proxies, such as smiling, this study finds that ICOs with more trustworthy-looking teams attract significantly more funding. However, this perceived trustworthiness is unrelated to post-ICO performance, suggesting a behavioral bias in investment decisions. The effect is stronger among individual investors and for ICOs in low-trust countries. Together, these findings highlight systematic biases in investor decision-making and underscore the importance of regulations in protecting investors in unregulated markets.

This paper examines the current landscape of investor protection and legal enforcement in Indonesia, focusing on the rising prevalence of default cases and illegal investment schemes. As the Indonesian capital market expands, retail investors remain vulnerable to fraudulent financial products and contractual breaches. Using normative legal analysis combined with case studies of recent high-profile defaults, this research evaluates the effectiveness of the Financial Services Authority (OJK) and the existing regulatory framework in providing legal certainty. The findings suggest that although Indonesia has established comprehensive regulations, enforcement mechanisms remain inconsistent. Bureaucratic complexities and the absence of integrated digital monitoring often weaken implementation. The study also highlights challenges in asset recovery for victims of illegal investments, where legal proceedings frequently fail to restore financial losses. Strengthening investor protection requires more rigorous supervision, swifter judicial action, and greater public financial literacy to mitigate the impact of “shadow banking” and unauthorized investment entities.

This study examines the normative tension between state sovereignty and investor legal certainty within the framework of international investment arbitration. Employing a doctrinal legal approach, the research analyzes statutory regulations, international legal instruments, and arbitral jurisprudence to assess how legal norms structure the relationship between regulatory authority and investment protection. The findings indicate that arbitration does not eliminate state sovereignty but reconfigures it through legality, proportionality, and good faith standards. Legal certainty for investors is contingent upon compliance with domestic law, while states retain authority to regulate in pursuit of public interests. The study further demonstrates that inconsistencies in regulatory design and institutional capacity intensify disputes and undermine normative balance. Accordingly, a coherent legal framework integrating national legislation, contractual design, and international commitments is required to ensure equilibrium. The research contributes to doctrinal development by proposing a prescriptive model that aligns sovereignty with investor protection in a dynamic legal order while emphasizing the necessity of interpretative coherence, judicial consistency, and regulatory clarity in contemporary investment governance systems globally today.

The high-speed development of the global startup environment has put more emphasis on venture capital and angel investment in fostering entrepreneurial projects. Although the external funding is necessary to support the growth and scaling of a startup, it has also resulted in governance structures that are more inclined towards the interests of the investors. Decision making power is often transferred to investors in investment agreements, representation in the board, protective measures and dilution of the equity. This change provokes the issue of the loss of the autonomy of the founders and the general impact of this on the process of innovation and entrepreneurial leadership. In this paper, the idea of startup sovereignty will be discussed through the lens of reevaluating founder autonomy through a pro-investor regulatory and investment system. The research applies a doctrinal approach to legal research to examine the norms of corporate governance, venture capital agreements, and regulation policies that affect the governance of startups. The results indicate that despite the need to have investor protection to ensure financial stability, too many control processes can deter the strategic autonomy of founders. This paper identifies that there is a necessity of a balanced system of governance that works towards safeguarding the investors without compromising the innovativeness driven by the founders.

The capital market is vulnerable to violations because it involves various parties. Violations can be administrative, such as failure to submit reports or permits from authorities, or more serious, such as market manipulation, insider trading, and fraud. One of the acts of manipulation in Indonesia occurred at the issuer PT. Sekawan Intipratama who made efforts to circumvent Indonesian regulations by carrying out a series of manipulation practices. Manipulation is a form of pseudo-practice in which transactions are carried out to deceive the market by creating the appearance of trading activity where none actually exists. The aim is to manipulate stock prices to reach a certain level desired by market participants to achieve goals that are not in accordance with actual transactions. As a result of this series, investors in the capital market experienced losses. This research uses normative juridical methods by collecting data from library studies. From the results of this research it can be concluded that: 1) The manipulation actions carried out by PT. Sekawan Intipratama in the Indonesian Capital Market is an act that violates the law. 2) Legal protection for investors for acts committed by PT. Intipratama comradeship can be done preventively or repressively. 3) Repressive protection for unlawful acts committed by PT. Sekawan Intipratama can be carried out in Litigation or Non-Litigation.

ABSTRACT The need for a specialized High Investment Court in Ukraine arises from the challenges of effectively adjudicating investment disputes, ensuring legal certainty and promoting economic growth. This research aims to analyze the feasibility and necessity of establishing such a court, taking into account international practices and the Ukrainian legal landscape. The methodology includes a comparative legal analysis of investment dispute settlement mechanisms in different jurisdictions, as well as an examination of current legal framework and arbitration procedures in Ukraine. The findings reveal significant gaps in the protection of investors’ rights, delays in the resolution of cases, and inconsistencies in judicial decisions that deter foreign investment. The study concludes that a High Investment Court would improve Ukraine’s investment climate by providing a specialized, transparent and efficient dispute resolution mechanism. Its establishment would align Ukraine with global best practices, increase investor confidence, and contribute to economic stability.

Abstract This study develops an explainable machine learning model to predict cryptocurrency delistings using Binance data. It combines quantitative indicators (price, volume) with qualitative data from real‐time news and Reddit. Latent Dirichlet Allocation (LDA) is used to extract topic trends and community reactions, which are transformed into time‐series features. XGBoost, LightGBM, and CatBoost are compared, with SHAP applied for model interpretability. Results show that sharp price drops, repeated risk‐topic exposure, and Reddit responses strongly predict delisting. XGBoost achieves the best performance, offering practical insights for early warning systems and investor protection.

In the process of the capital market’s comprehensive shift from the approval system to the registration system, the focus of supervision has moved from ex-ante examination and approval to in-process and ex-post supervision, and “taking information disclosure as the core” has thus become the core logic of the reform. Against this background, the importance of the construction of corporate integrity and the quality of information disclosure of listed companies has become increasingly prominent, which is not only related to the effective operation of the capital market, but also has a significant impact on the in-depth advancement of the registration system reform. This paper selects the fraudulent issuance incident in S Company’s refinancing after the implementation of the registration system as the research object to investigate the economic consequences caused by such behavior. The study finds that in the refinancing process, S Company misled the market through means such as fabricating transactions and concealing risks, resulting in direct damage to investors’ interests, abnormal stock price fluctuations, and the company itself falling into operational difficulties with a sharp decline in reputation. The incident has impacted the market order of the medical informatization industry and also put the regulatory efficiency under the registration system to the test. It can be seen that improving the regulatory system of the registration system and strengthening the protection of investors’ rights and interests are the key paths to promoting the steady progress of the registration system reform.

The article reveals the current state and prospects of investment support for environmental sustainability in terms of realizing their transfer potential, which serves as a strategic basis for the stable functioning of national economies in an environment of global turbulence. The volume and structure of capital investments in environmental protection by type of environmental protection measures for 2006-2024 are analyzed. The analysis showed that in 2024, the volume of capital investments decreased significantly – by UAH 5,432,849.30 thousand, returning to the 2014 levels. It was determined that the full-scale war caused a redirection of financial resources, which had a critical impact on capital investments in environmental protection. An analysis of the structure of investments by type of environmental protection measures in 2024 showed that the largest share of expenditures was for: waste management – 44.88%; wastewater treatment – 24.55%; air protection and climate change mitigation – 14.31%; and soil and water resource protection and restoration – 12.99%. It has been proven that the trend towards a reduction in capital investment in 2024 to the level of ten years ago (2014) indicates a critical drain of financial capital from the environmental sector. This creates the threat of a «technological rollback» when, due to a lack of funds, enterprises are forced to operate outdated, environmentally hazardous facilities. Factors influencing investment in the environmental sustainability of national economic systems have been identified and divided into external economic and geopolitical, state regulatory (institutional), economic and market, technological, and internal production factors. It is emphasized that in wartime, geopolitical and institutional factors dominate over market factors, as investment risks become too high for traditional businesses without state or international guarantees. It has been proven that the high share of factors related to waste management indicates a change in the investment vector. Under these conditions, the technological factor becomes key to the success of environmental sustainability; it depends on whether national systems can not only «utilize losses» but also integrate the principles of the circular economy into recovery processes.

Small and medium-sized enterprises (SMEs) are pivotal to economic growth and innovation; however, they frequently encounter significant challenges in accessing finance. In recent decades, the rise of SME equity exchanges globally has played a key role in facilitating SMEs equity financing. This article specifically examines the UK’s Alternative Investment Market (AIM), which has been a notable benchmark for such exchanges globally. As AIM approaches its thirty-year anniversary, the article evaluates its performance and operational model to assess its viability as an alternative financing platform for SMEs. It discusses the distinct private regulatory framework of AIM, primarily managed by Nominated Advisers (Nomads), and the implications of this model for investor protection. Despite its potential, AIM faces criticism due to issues such as inadequate oversight and frequent scandals, raising concerns about the reliability of SME exchanges. The findings underscore that while SME exchanges offer valuable financing alternatives, they must enhance their regulatory practices to improve investor confidence and ensure sustainable financing for SMEs. The article concludes that targeted reforms are necessary to balance market flexibility with robust investor protections, thereby strengthening the overall integrity of SME exchanges and supporting the growth of SMEs in both emerging and developed economies.

Crowdfunding, particularly investment-based crowdfunding (IBCF), has become a vital funding avenue for small and medium-sized enterprises (SMEs), enabling them to raise capital directly from the public. While IBCF offers advantages such as democratizing investment opportunities and lowering financing barriers, it also presents significant risks, including information asymmetry, fraud, and investor exposure. This article examines the evolution of the regulatory framework for IBCF in the UK from 2011 to 2024, focusing on the balance between encouraging sector growth and ensuring investor protection. Initially, the UK’s Financial Conduct Authority (FCA) adopted a principles-based regulatory (PBR) approach, promoting flexibility and growth. However, this model also led to gaps in platform accountability, with inadequate due diligence leading to misleading investments. In response, the FCA has introduced stronger liability requirements for platforms and tightened due diligence standards. Despite these efforts, challenges persist in ensuring consistent platform compliance and protecting investors from emerging risks. The article concludes that while the UK’s regulatory framework has adapted to mitigate IBCF risks, further refinements are needed to clarify platform responsibilities, enhance investor disclosures, and improve due diligence practices. Ongoing regulatory adjustments will be critical to maintaining investor confidence, supporting innovation, and ensuring crowdfunding remains a secure funding option for SMEs.

To enhance the attractiveness and competitiveness of EU capital markets, the 2024 Listing Act introduces targeted reforms to the Prospectus Regulation and the Market Abuse Regulation (MAR). This article identifies the main amendments to the EU prospectus regime and analyses to what extent they may reduce listing costs and contribute to a more attractive listing environment in the EU, without harming investor protection. The analysis focuses on three key areas of reform. First, the Listing Act significantly broadens exemptions to the prospectus obligation for secondary issuances. Second, it seeks to improve the readability and comprehensibility of prospectuses by introducing page limits and standardized sequences and formats and reducing disclosure regimes for already-listed issuers and Small and Medium-sized Enterprises (SMEs). Third, it addresses fragmentation across Member States by harmonizing the National Competent Authorities’ approval procedures for prospectuses. The analysis shows that, although the potential benefits of this reform may not be underestimated, it is unclear to what extent targeted amendments will significantly enhance listing activity in EU capital markets.

Purpose In a paper published titled “Culture, Openness, and Finance” in the Journal of Financial Economics which has been cited over 2,000 times, the authors, Stulz and Williamson (2003) (hereafter S&W), find that cultural differences, proxied by religion and language, impact shareholder rights, creditor rights and investor protection, and also include other control variables like trade openness, income and legal system variables. The purpose of this paper is to revisit the S&W study and extend their analysis by innovating across multiple margins. Design/methodology/approach The authors use econometric methods similar to those of S&W to replicate their results and innovate with new variables and methods. Findings In general, some of the authors’ findings are quite different from those of S&W. Like S&W, culture matters less when openness is factored in. The authors also find that religious traditions play a greater role in low-income countries. Practical implications Policymakers should prioritize investor protection reforms that are adapted to the religious and cultural contexts of each jurisdiction. International financial institutions and development agencies should incorporate cultural diagnostics – such as religious composition and trust indices – into their governance assessments and reform recommendations. This culturally attuned approach can lead to more sustainable financial systems globally. Originality/value This paper revisits the S&W study and innovates across multiple margins. The authors also include a new contribution to the literature examining how the interaction of culture and low-income countries affects finance.

ABSTRACT This study investigates the effect of climate risk on corporate employment decisions. Using a large sample from 41 countries, we find a positive association between climate risk and underinvestment in labor, notably manifesting as excessive employee layoffs. This indicates that climate risk leads to suboptimal employment decisions through labor cost reduction to mitigate the impact on firm performance. However, firms with higher commitment to social responsibility exhibit less suboptimal underinvestment in their workforce. Finally, we find that companies with greater financial constraints, those operating in highly polluting sectors, and those in countries with weak investor protection are more likely to underinvest in labor. Our study underscores the necessity for managers to integrate climate risk considerations into strategic planning to avoid suboptimal labor investments, whereas regulators are urged to enforce transparent climate risk disclosures and encourage CSR initiatives for sustainable employment practices.

ABSTRACT In many countries, banks are the primary distribution channel for mutual funds and predominantly sell products issued by their own asset management divisions (“affiliated funds”). We examine how this lack of competition affects managerial activeness, fund performance, and investor outcomes. Using a comprehensive sample of German equity mutual funds from 2010 to 2024, we find that, all else equal, the probability of being a closet indexer—a fund marketed as actively managed but instead closely tracking its benchmark—is about 10 percentage points higher for affiliated funds, relative to a sample mean of 22%. Moreover, bank affiliation is a significant determinant of the underperformance of closet indexers. Flow analyses show that investors in affiliated funds display pronounced inertia, implying that underperformance translates into tangible welfare losses. Our findings highlight how exclusive distribution channels weaken competition and reduce investor protection in retail fund markets.

Abstract In its 2021 Model Foreign Investment Promotion and Protection Agreement , Canada has sought to preserve regulatory flexibility by using terms like “legitimate policy objectives,” “legitimate public policy objectives,” and “legitimate public welfare objectives.” How can this threefold distinction of “legitimate objectives” impact the interpretation of international investment obligations? Through an analysis of the content of international investment agreements and awards from tribunals that have expressly referred to these terms, this article argues that various forms of “legitimate objectives” do not encapsulate distinct legally significant terms and could lead to unintended consequences.

Purpose This paper aims to investigate how institutional investors (IIs) influence corporate employment decisions and reduce labor investment inefficiency through two key mechanisms: active monitoring and market pressure. Design/methodology/approach This study focuses on a panel of 171 nonfinancial French-listed firms from the CAC All-Tradable index over the period 2008–2018 and use OLS regressions with year and industry fixed effects. This setting relies on homogeneous accounting standards, ensuring that labor investment measures and thus the estimated impact of IIs are robust and interpretable. Findings The results show that institutional ownership reduces labor investment inefficiency by curbing abnormal net hiring. This effect is driven by active monitoring from IIs, particularly those with long-term investment horizons, large ownership stakes or board representation. Moreover, the disciplining role of IIs is strengthened by market pressure, as the reduction in abnormal hiring is more pronounced in industries with high product market competition. Practical implications This study offers practical insights for policymakers and financial regulators to strengthen governance and address managerial entrenchment in weak investor protection settings. It also informs debates on institutional cross-ownership and guides investors and boards seeking to enhance efficiency and long-term value creation through active institutional involvement. Originality/value This study is among the first to explore institutional ownership heterogeneity in the context of firms’ labor investment efficiency in France by jointly identifying investors’ passive and active behaviors in terms of horizon and ownership. It also highlights product market competition as a key channel through which IIs influence labor investment efficiency.

Background: The coronavirus disease 2019 (COVID-19) pandemic created a period of economic turbulence, affecting firms’ performance and providing management with incentives to change their earnings management behaviour. While research has been conducted on the COVID-19 pandemic and other crises in developed markets, evidence from emerging markets, particularly Africa, is limited. Sector-specific research is even more limited. Aim: This study investigated the COVID-19 pandemic’s impact on accruals-based earnings management (AEM) behaviour in South Africa. The study also investigates differences in sector-specific responses. Setting: This study’s population comprised all 333 Johannesburg Stock Exchange (JSE) firms from 2016 to 2022. Method: This study examined 159 JSE-listed firms across eight sectors from 2016 to 2022 using fixed-effects panel regressions. Absolute and signed discretionary accruals were examined to measure changes in the magnitude and direction of AEM. Results: Firms engaged in more income-decreasing AEM during the pandemic, consistent with ‘big bath’ behaviour as explained by agency and prospect theory. COVID-19’s impact on earnings management was asymmetric across sectors. Sectors facing more pronounced operational restrictions during the pandemic, such as consumer discretionary and basic materials, experienced shifts in earnings management behaviour, while less affected sectors showed no significant change. Conclusion: The findings indicate that AEM behaviour changed in South African listed firms, and that this change was not uniform across sectors. Contribution: Sector-specific testing during a unique natural experiment with asymmetric economic impacts across sectors provides a clearer lens to examine management’s behaviour. The findings can be used to enhance investor protection, leading to greater economic stability. Awareness and consideration of these results in decision-making and monitoring can improve the firm’s control environment, ensuring better capital allocation.

The article provides a comprehensive analysis of foreign experience in implementing international legal norms in the field of virtual assets in order to identify models that could be effective for application in Ukraine. The experience of the European Union, the United Kingdom, the United States of America (hereinafter – the US), Japan, Singapore, South Korea, and El Salvador is considered separately. Particular attention is paid to the standards of the FATF, an organization that establishes rules for combating money laundering, terrorist financing, and the proliferation of weapons of mass destruction, as well as the mechanisms for their implementation in various jurisdictions. Their application is considered taking into account the impact on financial stability, investor protection, and the prevention of financial crimes. Foreign approaches to regulating virtual assets were analysed according to several criteria: 1) by the organization of supervisory powers – models with the dominance of a single financial regulator (the United Kingdom, Japan, Singapore, South Korea) and a multi-agent/fragmented system, where a number may authorities may regulate (the United States); 2) by the nature of regulatory control (degree of detail and formalization of rules); 3) by the strategy for implementing regulatory decisions, in particular theexperimental political and legal approach (El Salvador). Based on the analysis, recommendations have been formulated for Ukraine on adapting effective elements of international experience, in particular regarding centralized supervision, implementation of FATF standards and other relevant approaches, as well as the introduction of flexible and transparent mechanisms for regulating the cryptoasset market. Additionally, the importance of ensuring proper coordination between state bodies and consistency of regulatory policy with the strategic course of European integration is emphasized, which will contribute to increasing investor confidence, the stability of the national financial system, and expanding opportunities for Ukraine’s economic development.

The study examines the determinants of dividends decisions alongside dividends derivatives in Botswana and Zimbabwe. Further the study explored the importance of dividends derivatives for companies listed on both Stock Exchanges. The study was based on a mixed methods research approach. The research used simple random sampling of non-financial firms for the determination of dividend decisions. Documentary review research was also deployed in assessing the significance of dividends derivatives. The study was based on a sample of 27 companies listed on the Botswana and Zimbabwe Stock exchanges. Unit root analysis, test of normality, test of fixed effects and Granger causality tests were applied to evaluate the determinants of the of dividend decisions. Logistic regression analysis was applied to investigate the determinants of dividend decisions in Botswana and Zimbabwe. Granger causality was deployed to investigate the impact of short-term relationships influencing the propensity for dividend payout. The binary logit study revealed that the significant positive determinants of dividends payout were past dividends, investors preferences, derivative hedge and industry type. The fixed effect model revealed that a Chief Financial O possessing more than 15 years of experience, had a significant positive propensity for dividend payout in both countries. Firm size and free cash flows were viewed as having a significant and negative propensity for dividend payout from the fixed effect model. The determinants of dividend derivatives were identified as the rise of decrement indices, economic uncertainties and pandemic risks. The benefits of dividend derivatives were found as protection of investors against dividend risks during periods of existential threats, economic vulnerabilities and uncertainties.