R. Priem (2025). Enhancing energy derivatives trading: assessing the need to update the European DLT Pilot Regime Regulation. Journal of World Energy Law & Business Vol. 18(2), online.
Link: https://doi.org/10.1093/jwelb/jwaf007
Abstract: In recent years, start-ups have increasingly explored the application of distributed ledger technology (DLT) in energy markets, leveraging their capabilities for distributed energy generation, wholesale energy trading, transactions between charge point operators and electric vehicle owners, the leasing of residential storage devices, and the trading of energy-related cryptocurrencies. However, despite the potential benefits of DLT and smart contracts, their use in energy derivatives trading remains underdeveloped. Given the complex margining processes, record-keeping requirements, and regulatory reporting obligations associated with energy derivatives, DLT could offer significant advantages by enhancing automation, improving efficiency, and reducing costs. This article argues that the European Union’s DLT Pilot Regime Regulation—designed to foster the growth of secondary market infrastructures for digital securities and to provide regulators with insights into necessary adjustments to the existing framework—could be expanded to include energy derivatives. While the current regime facilitates experimentation with blockchain technology for shares, bonds, and undertakings for collective investments in transferable securities, extending its scope to energy derivatives would facilitate financial market participants to explore new technological solutions within a controlled regulatory environment. A regulatory sandbox for energy derivatives could drive innovation by allowing firms to test novel business models and trading mechanisms without the immediate burden of full regulatory compliance. This approach would not only promote efficiency, speed, and cost reduction but also provide valuable insights for regulators seeking to modernize financial market infrastructure in the energy sector.
R. Priem (2025). The impact of the Russia-Ukraine conflict on the behaviour of individual investors. Post-Communist Economies, online.
Link: https://www.tandfonline.com/doi/full/10.1080/14631377.2025.2511494?src=exp-la
Abstract: This article examines how individual investors react to the proximity of military operations thereby focusing on the early stages of the 2022 Russian invasion of Ukraine. Using a proprietary dataset covering almost 4 million transactions of individual investors, the study investigates the equity exposures of retail investors, revealing that individual investors initially increased their holdings in the first week but largely reversed these positions in the following 2 weeks. Applying OLS regression models on 144 aggregated investor categories (i.e. age, gender, and experience), the paper concludes that investor reactions to war interact with these demographic factors and should not be assessed in isolation, given that individuals aged 18–59+ increased exposure more than older counterparties, and experienced investors increased their equity holdings more compared to moderately experienced ones. Investors aged 80 or older tended to reduce their exposure unless they were highly experienced, in which case they increased it. This insight contributes to ongoing debates on how individual investors behave under stress and how behavioural biases, heuristics, and experiential earning manifest differently across demographic segments.
R. Priem (2025). Circuit breakers: A regulatory response to excessive volatility in the gas derivatives market. Journal of World Energy Law and Business Vol. 18(2), online.
Link: https://academic.oup.com/jwelb/article-abstract/18/2/jwaf002/8086432?redirectedFrom=fulltext
Abstract: This article is the first to discuss one of the main regulatory responses to the excessive volatility in the gas derivatives market during the period 2021–2023, namely the usage of circuit breakers. As a consequence of elevated and highly volatile energy futures prices, European policymakers decided to impose additional intra-day volatility mechanisms on trading venues. After providing an extensive literature review on circuit breakers, this article is the first to discuss the pros and cons that legislators considered when opting for government intervention by introducing this legal requirement for trading venues. By examining the rationale for legislative changes, this article contributes to the academic work on the regulation of energy derivatives. This article concludes that the benefits of the decision of European legislators to go beyond the existing financial requirements foreseen in the Markets in Financial Instruments Directive (MiFID) II and ask for additional intraday volatility mechanisms to be implemented are not completely supported by academic evidence. Yet, regulators left some flexibility to the market, as they were of the view that a one-size-fits-all approach would not be the way forward, and circuit breaker mechanisms had to take into account the diversity of instruments in energy derivatives markets as well as the peculiarities of the trading venues where these instruments are traded.
R. Priem (2025). Enhanced transparency on single-name credit default swaps: A comparison between the United States and the European Union. Economic Notes Vol. 54(1), e70007
Link: https://onlinelibrary.wiley.com/doi/abs/10.1111/ecno.70007?msockid=36962fb7b7036ebe31133b30b6ee6f10
Abstract: The goal of this article is to examine and compare the various actions that both US and EU legislators have taken—or want to take—to enhance the transparency of single-name credit default swaps (CDSs). Legislators on both sides of the Atlantic are of the view that enhanced transparency is beneficial but their focus is different. That is, the European Union focuses on enhancing pre- and post-trade transparency, whereas US legislators want to mitigate manufactured credit events by requesting disclosure of large positions. Both legislators are of the view that transparency could lead to enhanced market discipline and quality but where European Regulators focus on market participants knowing whether a transaction could take place at a certain price or has happened at certain conditions, US legislators believe that investors should have a more complete picture on creditors’ incentives in restructuring and whether there is a concentrated exposure to a limited number of counterparties. This paper discusses the regulatory differences and explains them based on the different market contexts in both continents.
R. Priem (2025). A DLT Pilot Regime Regulation: Introducing a new type of financial market infrastructure. Securities Regulation Law Journal Vol. 52(4), 289-316
Link: https://static.legalsolutions.thomsonreuters.com/product_files/relateddocs/4176_2024345_3295.pdf
Abstract: This article provides a holistic overview and discussion of Regulation (EU) 2002/858 on a pilot regime for market infrastructures based on distributed ledger technology. This article focuses on the new type of innovation that this pilot regime creates, namely a new kind of financial market infrastructure, called a DLT trading and settlement system (DLT TSS). Although both central securities depositories and investment firms can obtain a license to operate a DLT TSS, this paper documents that an unlevel playing field exist between central securities depositories compared to investment firms.
R. Priem (2024). A relaxation of European derivatives clearing legislation as a consequence of the 2021-2023 energy crisis. Journal of World Energy Law & Business Vol. 17(4), 277-293
Link: https://academic.oup.com/jwelb/advance-article/doi/10.1093/jwelb/jwae010/7686093
Abstract: This article discusses the update of the European Market Infrastructures Regulation as a consequence of the 2021–2023 energy crisis. This article explains European law decisions being made to ensure the continued functioning of European derivatives markets. The article focuses on the modification of the margin requirements of central counterparties (ie the decision to accept unsecured commercial bank guarantees, emission allowances, and/or debt issued by public entities as collateral). A relaxation of the stringent collateral requirements could on the one hand ensure energy firms’ continuation to central clearing, but on the other hand lead to negative macroprudential spillover effects. Although central counterparties are most useful in stressed market circumstances and then have to be sufficiently sound, the European Commission still opted for a temporary relaxation, and this article details all the pros and cons that were taken into account in this final decision.
R. Priem (2024). A market correction mechanism regulation as a consequence of the 2021-2023 energy crisis. Journal of World Energy Law & Business, Vol. 17(6), 407-421.
Link: https://doi.org/10.1093/jwelb/jwae015
Abstract: This article discusses the impact of the energy crisis, as a consequence of the Russian–Ukrainian conflict, on commodity derivatives trading regulation in Europe. More specifically, as a consequence of elevated and highly volatile gas futures prices, European legislators introduced a market correction mechanism (MCM) regulation on 22 December 2022, which came into effect on 15 February 2023. This article provides a detailed discussion of the MCM regulation and puts forward possible adverse scenarios in case of government intervention. This article also discusses the daily LNG price assessments and benchmark that the Agency for the Cooperation of Energy Regulators needs to publish for the MCM to function properly.
R. Priem, and A. Gabellone. (2024). The impact of a firm's ESG score on its cost of capital: Can a high ESG score serve as a substitute for a weaker legal environment? Sustainability Accounting, Management, and Policy Journal, Vol. 15(3), 676-703.
Link: https://www.emerald.com/insight/content/doi/10.1108/SAMPJ-05-2023-0254/full/html
Abstract: This article aims to analyse the relationship between the environmental, social and governance (ESG) score and the cost of capital of 600 large, mid and small capitalization companies across 17 countries that are component of the EURO STOXX 600 Index. By examining whether ESG has an impact on the cost of capital, this article contributes to the solutions to improve the impact of organizations and societies on sustainable development. The article further examines whether the effect is because of the environmental, social and/or governance components. In addition, the article analyses which WACC component (i.e. the cost of equity, the cost of debt, the beta or the leverage ratio) is affected. Furthermore, this article analyses whether a high ESG score can substitute for a weaker legal environment.
R. Priem (2023). A European harmonised settlement discipline regime: A focus on how investment firms need to prevent settlement fails. European Law Review, Vol. 48(5), 589-602.
Link: https://www.sweetandmaxwell.co.uk/Product/Academic-Law/European-Law-Review/Journal/30791372
Abstract: Settlement fails, where the seller does not deliver the securities or the buyer does not deliver the cash on the intended settlement date, have been substantial over the last few years. This article is the first to combine and discuss the measures to prevent settlement fails put forward by Regulation (EU) No 9090/2014 on improving securities settlement in the European Union and on central securities depositories (CSDR) that investment firms need to implement. That is, investment firms must have arrangements with their professional clients to ensure the prompt communication of an allocation of securities to the transaction, confirmation of that allocation, and confirmation of the acceptance or rejection of terms in good time before the intended settlement date. Not only is CSDR discussed in this article but also Commission Delegated Regulation (EU) 2018/1229 as well as the guidelines published by the European Securities Markets Authority (ESMA).
R. Priem (2023). Increased financial regulation in the European Union for energy firms extensively active in energy derivatives markets. Journal of Energy and Natural Resources Law, online commentary, 211-226.
Link: https://www.tandfonline.com/doi/full/10.1080/02646811.2023.2256596
Abstract: Because of the excessive prices and volatility in the energy derivatives markets over the period 2021–2023, margins increased considerably, leading major European energy companies to experience liquidity stress in meeting those. As a consequence, several local governments needed to provide guarantees to avoid their default. This article includes several legislative proposals to ensure that energy firms are prudentially safer and that there exists a level playing field among financial actors active in the same market segment. Specifically, this article proposes to (1) decrease the clearing threshold for commodity derivatives under the European Market Infrastructure Regulation (EMIR), (2) narrow the definition of hedging relevant to the calculation of the clearing threshold, (3) remove the intragroup exemption possibility under EMIR, and (4) make sure that energy firms can be categorised more easily as investment firms.
R. Priem (2022). A European distributed ledger technology pilot regime for market infrastructures: Finding a balance between innovation, investor protection and financial stability. Journal of Financial Regulation and Compliance, Vol. 30(3), 371-390.
Link: https://www.emerald.com/insight/content/doi/10.1108/JFRC-09-2021-0074/full/html
Abstract: This study aims to discuss the European Commission’s proposal for a pilot regime for market infrastructures to experiment with the distributed ledger technology (DLT). In this respect, the study comments on the purpose, scope, requirements and attention points for market operators, investment firms and central securities depositories (CSDs) that are considering using this technology.
R. Priem (2022). Risk management practices of central counterparties: European vs. third-country CCPs. Journal of Insurance and Financial Management, Vol. 6(2), 125-161.
Link: https://dial.uclouvain.be/pr/boreal/fr/object/boreal%3A266324/datastream/PDF_01/view
Abstract: Relying on recent CPMI-IOSCO public quantitative disclosure (PQD) data provided by 35 central counterparties (CCPs) over the 2015-2018 period, this paper empirically explores the risk management practices of central counterparties. We examine whether European CCPs are more prudent relative to their third-country peers. Our results indicate that EU CCPs request from their clearing members initial margins and default fund contributions that are of higher quality compared to those requested by non-EU CCPs. Omnibus and individual client segregation is more common in EU CCPs, suggesting a higher level of asset protection for clearing members. Regarding investment risk management, EU CCPs prefer to deposit cash at central banks, while non-EU CCPs rather have cash deposits at commercial banks. European CCPs have almost three times as many liquid resources than non-EU CCPs and rely more on cash deposited at central banks of issue. Their non-EU peers prefer unsecured cash deposits at commercial banks and unsecured committed lines of credit as liquidity resources.
R. Priem (2021). An exploratory study on the impact of the COVID-19 confinement on the financial behavior of individual investors. Economics, Management, and Financial Markets, Vol. 16(3), 9-40.
Abstract: This article explores the impact of the COVID-19 lockdown in Belgium on the financial behavior of individual investors. Specifically, the article is the first to examine whether exceptional market circumstances have induced individual investors to increase their equity positions. Using a proprietary database of almost 6.5 million individual investor transactions, this article shows that most individuals increased their equity positions during the pandemic, suggesting a contrarian strategy. Especially investors between 18 and 35 years old and those being less active are found to increase their equity positions compared to other age and activity level categories. Male investors seem to dominate equity markets in Belgium, even during the COVID-19 confinement period, and they increased their equity positions more in comparison to women. The patterns documented in this article are robust for the shares being constituents of the main Belgian equity index (i.e., Bel 20), for all listed shares on Euronext Brussels, and for small caps.
R. Priem, S. Coulier, S. Van Droogenbroeck (2021). Performance consequences for Belgian buy-out backed target companies. Revue bancaire et financière - Bank-en Financiewezen Vol. (2), 59-66
Link: https://www.stradalex.com/en/sl_rev_utu/toc/rbf_btw_2021_2-en/doc/rbf_bfw2021_2p59
Abstract: In this article, we empirically examine the performance consequences for 109 Belgian buy-out backed target companies over the period 2012-2019. We investigate whether buyout financiers succeed to increase target firms' industry-adjusted EBITDA margin and sales growth in the years following the ubyout. Furthermore, we analyze whetehr large investors are better capable to improve target performance compared to their smaller peers. We show that the average industry-adjusted EBITDA margin declines by almost two percent by the second year following the buyout. The industry-adjusted sales growth rate even decreases by almost 14%. hence, we find evidence that Belgian target companies, on average, suffer from performance deterioration after being funded by buyout financiers. We find no significant evidence that larger investors succeed at realizing performance improvements at the level of the target company.
R. Priem (2021). The impact of COVID-19 on Belgian individual investors' trading behaviour. Revue bancaire et financière - Bank-en Financiewezen Vol. (1), 2-9.
Link: https://www.stradalex.com/en/sl_rev_utu/toc/rbf_btw_2021_1-en/doc/rbf_bfw2021_1p2
Abstract: This article examines the financial behaivour of Belgian individual investors during the COVID-19 confiment. Using the MiFIR database of the Financial Services and Markets Authority (FSMA), this article shows that most individuals applied a contrarian strategy to buy shares when stock prices fell. Investors between 18 and 35 years of age and those who are less experienced increased their share positions compared to other age and experience categories. Men seemed to dominate equity markets in Belgium, even during the COVID-19 confinement period, and they increased their share positions more compared to women. The patterns documened in this article are robust for the stocks that are part of the main Belgian equity index (i.e. BEL 20), for all listed shares being a constituent of the Bel All Shares Index, and for small caps having a market capitalization of less than EUR 940 million.
R. Priem, W. Van Rie (2020). The Euribor and Eonia reform: Achieving regulatory compliance while protecting financial stability. International Journal of Business, Economics and Management, Vol. 8(2), 50-69.
Link: https://archive.conscientiabeam.com/index.php/62/article/view/1268/1791
Abstract: Based on an extensive review of the academic and legal literature combined with a screening of news articles and policy papers, this article is the first to describe in great detail the events leading up to the EURIBOR reform and the efforts to make EURIBOR compliant with the European Benchmark Regulation. It documents the development of the hybrid EURIBOR methodology to ensure the benchmark to be anchored to transactions as much as possible thereby reducing manipulative behavior. The article further explains the actions undertaken by the administration and the EU RFR Working Group to transition from EONIA towards €STER and the reasoning behind the choice to recalibrate EONIA into €STER plus a spread. Although EURIBOR is considered BMR-compliant since 2 July 2019 and EONIA can continue to be used until 3 January 2022, this article explains why markt participants should not be disincentivized to already take actions to provide for fallback rates to EURIBOR in their legal documentation, and to move away from EONIA. This study addresses various fallback methodologies.
R. Priem (2020). Asset segregation at CSDs: Protecting investors with a level playing field. European Business Law Review, Vol. 31(5), 917-946
Link: https://kluwerlawonline.com/journalarticle/European+Business+Law+Review/31.5/EULR2020034
Abstract: This article provides an analysis of the various assets segregation requirements that central securities depositories (CSDs) need to adhere to. Omnibus segregation is likely to be preferred to individual client segregation in those jurisdictions where the legal rights of investors are equivalent regardless of the level of segregation. Individual client segregation could be chosen more often in jurisdictions where ultimate investor accounts are needed to determine the legal owner of the securities. Individual client segregation is expected to be costlier and CSDs are likely to reflect these costs in the settlement fees charged to their customers in order to stay profitable. Hence, CSDs located in Member States with a higher likelihood that individual client segregation is chosen are likely to face a competitive disadvantage vis-à-vis CSDs domiciled in a jurisdiction where omnibus segregation is deemed protective. This article further explains the level-playing-field issues regarding asset segregation between CSDs and global custodians. This paper describes the wish of CSDs to be exempted from certain asset segregation rules while global custodians require CSDs to be submitted to the same asset segregation rules to which they need to adhere to.
R. Priem (2020). Distributed ledger technology for securities clearing and settlement: Benefits, risks, and regulatory implications. Financial Innovation, Vol. 6, 1-25.
Link: https://jfin-swufe.springeropen.com/articles/10.1186/s40854-019-0169-6
Abstract: This article outlines the benefits and risks of the distributed ledger technology (DLT) for the clearing and settlement of exchange-traded and OTC securities, followed by a description of the technology’s potential role for central counterparties and central securities depositories. Although the industry and scholars are attempting to solve the technological and operational issues that DLT systems still face, outstanding legal risks are such that the financial industry is asking for more regulatory guidance and intervention. This article wants to contribute to the public policy debate by presenting potential regulatory barriers that may have to be removed for DLT to be fully adopted. In addition, it identifies areas requiring an update of the legal framework in order to address certain prudential and conduct risks that this technology could introduce.
R. Priem (2020). The ABC of capitalism. Review of Political Economy, Vol. 32(3), 438-485.
Link: https://www.tandfonline.com/doi/full/10.1080/09538259.2020.1785686
Abstract: This article is a review of the book written by Vivek Chibber called the ABC of capitalism.
R. Priem (2018). CCP recovery and resolution: Preventing a financial catastrophe. Journal of Financial Regulation and Compliance, Vol. 26(3), 351-364.
Link: https://www.emerald.com/insight/content/doi/10.1108/JFRC-03-2017-0032/full/html
Abstract: This paper aims to discuss the European Commission’s proposal for a central counterparty (CCP) recovery and resolution regulation. In this respect, the paper comments the consequences, risks and attention points for CCPs and their authorities.
N. Huyghebaert, R. Priem (2016). Syndication of European buyouts and its effects on target-firm performance. Journal of Applied Corporate Finance, Vol. 28(4), 95-117.
Link: https://onlinelibrary.wiley.com/doi/abs/10.1111/jacf.12209
Abstract: Using a unique dataset of 859 leveraged buyouts in Europe during the period 1999–2009, the authors' recent study reports that buyout financiers syndicate their transactions to other buyers to achieve benefits that include diversification of different types of target risk, the combination of complementary investor information and skillsets, and an increase in future deal flow. The authors also report that lead financiers structure their syndicates in ways designed to minimize syndication costs, in particular potential information and incentive problems with co-investors in the syndicate, while also aiming to maximize the syndication benefits mentioned above. For example, through effective management of conflicts of interest with co-investors within their syndicates, lead financiers are likely to acquire a reputation for looking out for the interests of their co-investors that ends up increasing their own deal flow. As additional evidence in support of this claim, the authors also report finding that the post-buyout profitability and growth of the target companies are higher when buyouts are syndicated (even after adjusting for the “endogeneity” of such decisions) and when the syndicates are structured to limit inter-investor conflicts of interest within the syndicate. And as the authors point out, this finding, when viewed with the other main findings cited above, provides a more positive view of European buyout syndicates than the one projected by studies of Anglo-American syndicates to date, whose findings have emphasized the potential for collusion among the buyout financiers.
N. Huyghebaert, R. Priem (2015). How do lead financiers select their partners in buyout syndicates? Empirical results from buyout syndicates in Europe. European Management Review, Vol. 12(4), 221-246.
Link: https://onlinelibrary.wiley.com/doi/abs/10.1111/emre.12051
Abstract: Relying on a unique dataset covering 366 buyout syndicates in Europe over the period 1999–2009, we empirically investigate the partnering decisions of lead financiers. We find that lead financiers select investors with whom they developed a prior relationship, either directly or indirectly. Also, lead financiers prefer partners with expertise in the target industry and partners with knowledge about target-country institutions, particularly when their own knowledge in these areas is limited. Finally, they favor investors with a similar level of cognition and status. We further show that these results are mainly driven by the risky buyouts in the sample. Overall, the above partnering choices are found to have genuine economic effects for the post-buyout performance of target firms, with expertise as regards the target industry and target-country institutions having the largest beneficial effect.
R. Priem (2025). Regulatory sandboxes: A tool to steer the market away from decentralized finance (DeFi)?
Link: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5147407
Abstract: The swift expansion of Decentralised Finance (DeFi) has garnered increased scrutiny from regulatory bodies due to its potential risks and the absence of a central entity responsible for accountability. While DeFi offers certain benefits for the trading of security tokens, its decentralised structure challenges current regulatory systems that depend on centralised oversight. Global standard-setting bodies have therefore intensified their calls for regulators to address DeFi-related vulnerabilities before DeFi becomes systemic. This document thoroughly analyses the difficulties associated with DeFi and proposes possible regulatory strategies. These strategies could involve overseeing entities with particular degrees of influence, such as developers and validators, integrating regulation through dedicated supervisory nodes, and/or establishing a reliable regulatory protocol layer. Yet, policymakers might be even more inclined to rather guide the financial market towards more centralised financial systems (CeFi) by promoting the creation of regulatory sandboxes. This initiative could encourage the development of innovations that comply with regulations while reducing risks.
R. Priem (2025). A European DLT Pilot REgime: Introduction of a new financial infrastructure, but a missed opportunity without derivatives?
Link: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5189289
Abstract: This article presents a comprehensive overview and analysis of Regulation (EU) 2022/858, which introduces a pilot regime for market infrastructures utilizing distributed ledger technology (DLT). It highlights the innovation brought about by this pilot regime, specifically the creation of a new type of financial market infrastructure known as a DLT trading and settlement system (DLT TSS). The article also discusses how both central securities depositories and investment firms can obtain licenses to operate a DLT TSS, but points out the existence of an uneven playing field between central securities depositories and investment firms. Furthermore, this article highlights that the DLT Pilot Regime Regulation does not allow experimentation with derivatives, although DLT and smart contracts might enable process innovation. Given the low number of applications, including derivatives might make the pilot regime more attractive.
R. Priem (2025). Regulatory sandboxes for security tokens trading: A policy instrument for diverting market activity from decentralised exchanges (DEXs)?
Link: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5189291
Abstract: The swift expansion of Decentralised exchanges (DEXs) has garnered increased scrutiny from regulatory bodies due to its potential risks and the absence of a central entity responsible for accountability. While DEXs offer certain benefits for the trading of security tokens, their decentralised structure challenges current regulatory systems that depend on centralised oversight. This article thoroughly analyses the difficulties associated with DEXs and proposes possible regulatory strategies. These strategies could involve overseeing entities with particular degrees of influence, such as developers and validators, providing opinion letters combined with self-regulation, or integrating regulation through dedicated supervisory nodes. Yet, policymakers might be even more inclined to rather guide the financial market towards more centralised exchanges (CEXs) in the case of security tokens by promoting the creation of regulatory sandboxes. This initiative could encourage the development of innovations that comply with regulations while reducing risks.
R. Priem (2024). Will a reviewed European Markets in Financial Instruments Regulation (MiFIR) make single-name credit default swaps more transparent?
Link: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4822491
Abstract: Regulation (EU) 2024/791 (“MiFIR Review”) amended the European Markets in Financial Instruments Regulation (“MiFIR”) intending to make EU financial markets more transparent and increase their competitiveness. This article discusses the MiFIR Review concerning the transparency requirement for single-name credit default swaps. The article concludes that the MiFIR Review is notf ar reachin making these derivatives more transparent given that single-name CDSs not referring to Globally Important Systemic Banks (G-SIBS) (i.e. around 92% of the market) are not majorly impacted and these referring to G-SIBS but not centrally cleared could also remain opaque. A very large fraction of the single-name CDS market is thus not affected or can continue to be subject to pre-trade transparency waivers or post-trade deferrals foreseen in MiFIR. Yet, based on an extensive literature review, this article claims that even more transparency compared to what the MiFIR Review envisages might not be beneficial for market quality in the first place. In the case of a market in which there are few buyers and sellers willing to trade continuously, more transparency could lead to even less liquidity. In case of enhanced transparency, the limited number of available liquidity providers would be obliged to make their trading strategies available, which gives them incentives to trade even less. The MiFIR Review thus strikes an appropriate balance between reducing the level of opaqueness while not harming liquidity.
R. Priem (2024). Credit-sensitive rates: Why should they be used with great caution?
Link: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4971400
Abstract: As potential alternatives to the London Interbank Offered Rate (LIBOR), credit-sensitive rates (CSR) were developed in addition to the overnight risk-free rates, like SOFR. These CSRs namely contain a credit component and are thus more similar to LIBOR in capturing the credit risk component of unsecured bank borrowing. Based on an analysis of existing academic literature, press reports, and analyses from regulators and administrators, this article examines the question of whether CSRs should be encouraged or rather be avoided. This article highlights the potential advantages of these rates, such as their usability for asset-liability risk management and hedging purposes, but warns for the risks attached to them. That is, CSRs are mostly based on short-term money market instruments, like commercial paper and certificates of deposits, and liquidity in these financial instruments was almost non-existent during previous market stress events, like the COVID-19 financial crisis. These benchmarks could thus suffer from the same weaknesses as LIBOR in that they represent an inactive underlying market. CSRs are not illegal and can thus be freely used in the US but users should utilize them with great caution.
R. Priem (2024). Governance of distributed ledger technology when applied to securities trading: Can a public, permissionless system be the norm?
Link: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4935365
Abstract: This article critically examines the potential for a fully decentralised, permissionless blockchain system to replace traditional financial intermediaries in trading and post-trading processes, such as clearing and settlement. Through an extensive literature review, the paper explores the feasibility of a public, decentralised system becoming the new standard in the financial industry. Central to this discussion are questions of blockchain governance, including rule-setting, network access, protocol updates, and dispute resolution, which differ significantly between permissioned and permissionless, as well as public and private, DLT systems. The article concludes that, despite the promise of trustless systems and decentralised governance, private, permissioned blockchains with a central institution are likely to remain the norm in the financial sector. This is due to their need for less thorough consensus mechanisms leading to enhanced scalability, easier code updates, simplified dispute resolution, and greater regulatory compliance. Moreover, regulators are encouraging the financial industry to experiment with private, permissioned distributed ledger technology (DLT). DLT is thus rather to be a supplement rather than a substitute for the existing trading and post-trading ecosystem, offering a less disruptive path that aligns more closely with existing legal frameworks and regulatory practices.
R. Priem (2024). Experimenting with the distributed ledger technology: A comparison between the EU DLT Pilot Regime Regulation and the UK Digital Securities Sandbox.
Link: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4935361
Abstract: This article provides a comprehensive comparison between the European DLT Pilot Regime Regulation and the UK Digital Securities Sandbox, which both have the intention for market infrastructures to experiment with the distributed ledger technology (DLT). It has been documented that regional regulatory sandboxes can raise the concern of potential regulatory arbitrage and a 'race to the bottom' competition among jurisdictions, which necessitates a detailed examination of whether one sandbox is more flexible or easier to experiment with compared to another. The paper concludes that the UK DSS provides more flexible powers to the UK authorities and is broader in scope in terms of potential participants, the type of technology one can experiment with, the type of activities that can be performed, the type of financial securities one can experiment with, and the limits participants are subject to. Yet, this paper does not conclude that the UK DSS is in general less stringent than the EU DLT Pilot Regime as no deregulation is foreseen in the UK DSS for trading venues that want to experiment with the technology. In addition, the UK foresees a stringent structured approach with 'stages' and 'gates' to be passed to continue the experimentation.
R. Priem (2024). Single-name credit default swaps: How to ensure independent credit event decisions?
Link: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4799001
Abstract: The single-name CDS market is subject to a considerable degree of uncertainty, such as whether an event can legally be considered a credit event triggering a payout; a decision taken by the Determinations Committees (DCs). Criticism namely exists on the independent functioning of these committees that have a quasi-judicial function for more than 90% of the 4 trillion USD single-name CDS market. As a review of the structure and governance of the DCs is recently launched, this paper provides suggestions on how to improve their independent functioning. That is, this article suggests that the functioning of the committees can be improved by including conflicts of interest and transparency requirements for voting members in the DCs’ rules, making sure that not all voting members represent the largest buy- or sell-side market participants, giving central counterparties voting rights, installing an appeal procedure against DC decisions, and having an independent secretariat.
R. Priem (2024). Single-name credit default swaps: Increased disclosure to mitigate manufactured credit events?
Link: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4783189
Abstract: The goal of this article is to analyze whether increased disclosure on large single-name credit default swap positions of market participants could reduce the risk of manufactured credit events (i.e. transactions in which a CDS counterparty actively takes steps to avoid, trigger, delay, accelerate, decrease, and/or increase payouts on CDSs). In light of the consultations that the US Securities and Exchange Commission has made on this topic in 2021 and 2023 (i.e. proposal 10B-1), this article has the goal to provide policymakers, regulators, and scholars a detailed overview of the potential benefits of enhanced disclosure, such as increased market discipline and a better view on creditors’ incentives in restructuring, as well as the potential disadvantages, such as increased opportunistic behavior because of the possibility to front-run dealers’ hedging activity and confidentiality concerns. This article thus advices legislators to carefully consider the pros and cons before taking a final decision to impose increased disclosure. In case legislators would still opt for more disclosure, this article puts forward several suggestions such as thresholds based on percentage rather than absolute amounts and the disclosure of short positions rather than gross ones.
R. Priem (2024). Single-name credit default swaps: To clear or not to clear?
Link: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4721103
Abstract: This paper discusses whether mandatory central clearing of single-name credit default swaps (CDS) should be recommended to European and US legislators, thereby taking the benefits of central clearing, such as reduced counterparty credit risk, as well as the disadvantages, like increased margin requirements for counterparties, into consideration. In March 2023, the banking turmoil caused a four-fold increase in the number of single-name credit default swaps referencing certain globally systemic banks. On top of that, the media claimed that a single CDS transaction of roughly 5 million EUR fuelled a dramatic sell-off of equity causing heavy drops in share prices. One of the conclusions of regulators was that the single-name CDS market is opaque and subject to a high degree of uncertainty and speculation. Based on an extensive legal analysis and literature overview, this paper is the first to discuss whether imposing a mandatory clearing obligation on these kinds of financial products should be recommended as regulatory action. This article concludes that, although mandatory clearing clearly has benefits, many single-name CDSs are too illiquid, not perfectly standardized, and too opaque to be suitable in the short term given that central clearing would create prudential risks for central counterparties without yielding many multilateral netting benefits.
R. Priem and E. Robbe (2024). Do single-name CDS markets lead equity and bond markets? A literature review
Link: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4935359
Abstract: This paper provides a literature review on studies examining whether the single-name CSD market leads the equity and bond markets. In the wake of the banking turmoil in 2023, regulators and media are concerned that an opaque and illiquid derivative market can be used to impact the stock and/or bond prices of reference entities, in particular for global systemically important financial institutions. Previous studies support the view that CDS spreads lead bond prices. Yet, with respect to the lead-lag relationship with equity prices, findings are inconclusive. This paper highlights that contradictory results cannot be explained by the choice of the geographical region, the time period, the methodology or the data source. Future areas for research are put forward in this article in an attempt to bring more clarity on the CDS-equity relationship.
R. Priem (2022). Blockchains and OTC derivatives markets: A possible combination?
Link: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4286043
Abstract: In this article, a possible impact of blockchains on OTC derivatives is examined. The distributed ledger technology (DLT), of which blockchains are an operationalisation, has indeed received extensive consideration over the last few years from market participants, financial market infrastructures, and regulators. The article first explains in detail how blockchains work. When the basic concepts are clear, the current trading lifecycle is highlighted, followed by an argumentation on how blockchains could make the existing lifecycle more efficient. Not only will this article focus on the potential advantages of DLT, but also on new risks and threats that this technology might give rise to. Finally, this article ends with regulatory evolutions.
R. Priem (2023). The impact of the distributed ledger technology on OTC derivatives Markets. In B. Zagrebs, V. de sierer, R. Stegeman, P. Pearson (Eds.), Clearing OTC derivatives in Europe. Oxford University Press.
R. Priem (2019). Capital investment policy - Part 1. Acco Leuven press.
Link: https://books.google.be/books/about/Capital_Investment_Policy.html?id=ZRJt0AEACAAJ&redir_esc=y
R. Priem (2024). Adopting credit-sensitive rates could pose great risks to financial markets - ProMarket - University of Chicago booth
R. Priem (2024). Exploring distributed ledger technology: A comparative study of the EU DLT Pilot Regime Regulation and the UK Digital Securities Sandbox - Oxford Business Law Blog
R. Priem (2024). Unmasking the default waterfall: did CCPs shift risk post-recovery regulations? - Post-trade 360.com
R. Priem (2024). Is mandatory clearing of single-name credit default swaps a good idea? - Columbia Law School's blog on corporations and the capital markets
R. Priem (2024). This why CCPs should get voting rights in the Determination Committees - Post-trade 360.com
R. Priem (2024). Determination committees deciding on credit event decisions should bolster independence. - ProMarket - University of Chicago Booth
R. Priem (2024). Enhancing derivative market transparency: The entry into force of EMIR Refit - Oxford Business Law Blog
R. Priem (2024). EMIR Refit: So how did it go? - Post-trade 360.com
Link: https://posttrade360.com/news/regulation/randy-priem-emir-refit-so-how-did-it-go
R. Priem (2024). Will the MiFIR Review make single-name credit default swaps more transparent? - Oxford Business Law Blog
R. Priem (2024). Mandatory central clearing is not the solution to risk from single-name credit default swaps. ProMarket - University of Chicago Booth
R. Priem (2024). Does the EU's MiFIR Review make single-name credit default swaps transparent enough? European Law Blog
R. Priem (2024). Single-name credit default swaps: To clear or not to clear? International Business Digest - Hofstra University
Link: https://www.hofstrajibl.org/2024/04/single-name-credit-default-swaps-to-clear-or-not-to-clear/
R. Priem (2020). The purchase and sale of BEL 20 shares by individual investors during the coronavirus crisis. Financial Services and Markets Authority.
R. Priem (2018). Asset segregation rules for central securities depositories: Maximizing investor protection while ensuring a level playing field. University of Oxford Business Law Blog.
2025: What's up in clearing policy making - presented at The PostTrade 360° Nordic 2025 conference - Stockholm
2025: The insights from the EU DLT Pilot Regime - presented at The PostTrade 360° Nordic 2025 conference - Stockholm
2025: Supervision of financial benchmark administrators - presented to the OECD - Brussels
2025: From CCP to CSD: At what stage is creating a CCP beneficial? - Predicting the future CCP: DLT, atomic settlement, disintermediation, and auto-liquidiation - presented at WFEClear 2025 - Seoul (South Korea).
2025: How to enhance trade repositories' data quality - presented at the US Treasury's OTC derivatives Regulators' forum event - Washington DC.
2025: Third-party risk management at FMIs - presented at the virtual BSBC third-party risk management outreach - Singapore
2024: The future or regulatory reporting - presented at the Regis-TR annual client meeting - Madrid (Spain)
2024: Improved margin transparency and responsiveness for centrally and non-centrally cleared derivatives - presented at the FSI-IOSCO annual meeting - Basel (Switzerland)
2024: Operational resilience at financial market infrastructures: where to focus on as regulators? - presented at the IOSCO AMCC annual meeting - Toronto (Canada).
2024: EU and UK Sandbox Regimes and industry adoption of Digital Securities - presented at the AFME Optiq 2024 conference - London (UK).
2024: All safe? The latest and what's next in CCP recovery and resolution - presented at The PostTrade 360° Nordic 2024 conference - Stockholm (Sweden)
2024: Setting a benchmark in data management and governance - presented at Infoline Trade & Transaction reporting - Amsterdam (Netherlands)
2024: The practicalities of DLT and clearing - presented at WFEClear 2024 - Madrid (Spain)
2024: EMIR 3.0, are we getting it right - presented at the CEPS-ECMI event - Brussels (Belgium)
2023: The role of the external auditor with respect to EMIR compliance of non-financial counterparties - presented at the Institute of Corporate Auditors - Brussels (Belgium)
2023: Building a competitive landscape for European market infrastructures - presented at the AFME Optic 2023 event - Brussels (Belgium)
2023: The impact of a firm's ESG score on its cost of capital, can a high ESG score serve as a substitute for a weaker legal environment? - presented at the Corporate Finance Day - Lille (France)
2023: Virtual currencies: risks and opportunities - presented at the 51 club seminar - Brussels (Belgium)
2023: The future of financial market infrastructures: A perspective on DLT for clearing and settlement - presented at the EACH risk managers annual meeting - Brussels (Belgium)
2023: The future of financial market infrastructures: A perspective on DLT for securities clearing and settlement - presented at the LSE law seminar - London (UK)
2021: Virtual currencies: dangerous or somewhat reliable? - presented at the Flanders Science Day - Leuven (Belgium)
2021: Risk management practices of central counterparties: European vs third-country CCPs - presented at the World Finance Conference - Oslo (Norway)
2021: The AML consequences vor virtual assets service providers - presented at the National Task Force on Virtual Currencies - Brussels (Belgium)
2020: Remaining challenges in transitioning away from IBORs and the proress on LIBOR end game - presented at the 15th BCBS-IOSCO virtual conference on securities trading issues and market infrastructure - Madrid (Spain).
2020: The EURIBOR and EONIA reform: Achieving regulatory compliance while protecting financial stability - UBI Webinar Series - Brussels (Belgium)
2020: The implementation of the fifth anti-money laundering directive for virtual assets service providers - presented at the Creobis AML 5 conference - Brussels (Belgium)
2019: The future of financial benchmarks - presented at the 2019 IOSCO AMSS training seminar - Madrid (Spain)
2019: Euribor and Eonia authorisation and reforms - presented at the EUR interest rates, development and challenges ESMA workshop - Paris (France).
2019: The benchmarks reform in the EU and in the UK, official sector's perspective regarding the impact on cleared derivatives markets - presented at the FIA compliance & regulation forum - London (UK).
2012: Partner-selection decisions of lead financiers: empirical results from buyout syndicates - presented at the Shanghai conference on finance and entrepreneurship - Shanghai (China).
2012: Partner-selection decisions of lead financiers: empirical results from buyout syndicates - presented at the Belgian financial research forum - Antwerp (Belgium)
2012: Partner-selection decisions of lead financiers: empirical results from buyout syndicates - presented at the FMA Annual meeting - Atlanta (US).
2012: Partner-selection decisions of lead financiers: empirical results from buyout syndicates - presented at Schulich School of Business Research series - Toronto (Canada).
2012: Partner-selection decisions of lead financiers: empirical results from buyout syndicates - presented at FMA European conference - Istanbul (Turkey).
2011: Incidence and structure of buyout syndicates: The effects of target and lead-investor characteristics - presented at the WHU Otto Bisheim School of Management - Vallendar (Germany).
2011: Incidence and structure of buyout syndicates: The effects of target and lead-investor characteristics - presented at the International Conference on Money, Investment, and Risk - Nottingham (UK)
2011: Incidence and structure of buyout syndicates: The effects of target and lead-investor characteristics - presented at Midwest Finance Association Annual Meeting - Chicago (UK)
2011: Incidence and structure of buyout syndicates: The effects of target and lead-investor characteristics - presented at 3L Finance research workshop - Brussels (Belgium)
2011: Incidence and structure of buyout syndicates: The effects of target and lead-investor characteristics - presented at Southwestern Finance Association - Houston (UK).
2011: Incidence and structure of buyout syndicates: The effects of target and lead-investor characteristics - presented at FMA European Conference - Porto (Portugal)
2010: Incidence and structure of buyout syndicates: The effects of target and lead-investor characteristics - presented at the Corporate Finance Day - Groningen (Netherlands).