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Financial Markets Law and Regulation

Module description

This module analyses the legal rights of parties to financial and investment contracts and the UK regulatory system governing the entirety of investment regulation (that is, everything that is neither banking nor insurance) by the Financial Conduct Authority. This module will equip you with the knowledge and skills required to understand the practice of finance law in City law firms. It draws on the root principles in the EU Markets in Financial Instruments Directive and other regulation, as implemented in the UK (which remains Europe’s largest investment market). In this module, you will cover the conduct of business regulation, financial promotion, and the effect of the global financial crisis. You will analyse problems in the creation of contracts, and liability for wrongs and for breaches of fiduciary duty. You will also analyse mainstream investment, collective investment schemes, and social investment.

Module aims - intentions of the module

The underlying aim of this module is to identify and explore the fundamental principles of financial regulation relating to the selling of financial instruments and investment products as identified by statute (thus excluding deposit-taking banking business). The module covers international, EU and UK regulatory initiatives. Among the regulatory fields which are covered are: conduct of business, financial promotion
and investor protection more generally; market abuse; issues of securities; and capital maintenance.

The more detailed aims of this module are therefore for you to:

• analyse the principles of the law of finance as they relate to the overlap between norms of financial regulation and norms of substantive law;
• analyse the law governing the creation of contracts in high-volume financial markets between traders, and between traders and retail customers;
• analyse the liabilities of financial institutions for wrongs and breaches of fiduciary duty in financial transactions;
• analyse the efficacy of the regulations in the FCA Handbook in the context of investment business;
• explore the policies underpinning the reforms to EU and UK regulatory structures in the wake of the financial crisis of 2007-09, UK exit from the EU (Brexit) and other recent developments; and
• develop a critical understanding of standard market practice and the issues with transacting in compliance with financial regulation.

Intended Learning Outcomes (ILOs)

ILO: Module-specific skills

On successfully completing the module you will be able to...

• 1. Demonstrate detailed knowledge of principles of financial regulation and of the substantive law relating to investment contracts
• 2. Evaluate critically the effectiveness of financial regulation in the context of investment business
• 3. Demonstrate in-depth knowledge of principles of common law and equity in relation to investment business

ILO: Discipline-specific skills

On successfully completing the module you will be able to...

• 4. Apply principles of the common law and equity to understanding financial law problems
• 5. Analyse critically the nature and objectives of the law in relation to investment business

ILO: Personal and key skills

On successfully completing the module you will be able to...

• 6. Analyse issues arising from the inter-action of principles of substantive law and financial regulation in a specific commercial context
• 7. Ability to critically evaluate legal and commercial issues arising in financial regulation

Syllabus plan

Whilst the module’s precise content may vary from year to year, it is envisaged that the syllabus will cover some or all of the following topics:

• Sources of financial regulation
• The Financial Conduct Authority regime under the Financial Services and Markets Act 2000
• Conduct of business regulation
• Issues in the creation of contracts
• The nature of financial contracts
• The liability of financial institutions at common law and in equity
• Taking security and recovering property in financial contracts
• The nature of investment entities
• Communal investment schemes; unit trusts and collective investment schemes

Learning activities and teaching methods (given in hours of study time)

Details of learning activities and teaching methods

Formative assessment

Summative assessment (% of credit)

Details of summative assessment

Details of re-assessment (where required by referral or deferral)

Indicative learning resources - Basic reading

Module textbook:
John Armour et al., Principles of Financial Regulation (OUP, 2016)
Niamh Moloney, EU Securities and Financial Markets Regulation (OUP, 2016)
Eilis Ferran & Look Chan Ho, Principles of Corporate Finance Law (OUP 2014)
Collin Bamford, Principles of International Financial Law (OUP 2020)

Other textbooks:
Ellinger, Lomnicka and Hare, Modern Banking Law (5 th ed., Oxford, 2010).
R Cranston, Principles of Banking Law (Oxford, 2018).

Library reference:
W Blair and G Walker (eds), Financial Services Law (4e, OUP, 2018)
W Blair and G Walker (eds), Financial Markets and Exchanges Law (3e, OUP, 2021)
Butterworths Banking Law Encyclopaedia, (LexisNexis, looseleaf) covers a part only of the module.
Financial Services Law Encyclopedia, (Sweet & Maxwell, looseleaf), annotated statutes only.
Alastair Hudson, The Law on Financial Derivatives (6th ed., Sweet & Maxwell, 2017)
Alastair Hudson, Securities Law (2nd ed, Sweet & Maxwell, 2013)
Alastair Hudson, The Law of Finance (2nd ed., Sweet & Maxwell, 2013)

Indicative learning resources - Web based and electronic resources

Journal articles, case law and statutes available through the ordinary legal databases. FCA financial regulation all available free on-line via www.fca.gov.uk. 

Key words search

Financial Services, Financial Regulation, Financial Markets Law