LLAW6244 Securities regulation II

1.1 Course details

Course code: LLAW6244 / JDOC6244
Course name: Securities Regulation II
Programme offered under: LLM Programme / JD Programme
Semester: Second
Prerequisites / Co-requisites: Successful completion of LLAW6049 Securities regulation I, or demonstrated knowledge of the securities industry consistent with the scope of Securities regulation I.
Credit point value: 9 credits / 6 credits
Cap on student numbers: 60

1.2 Course description

The course will build on and develop concepts and issues that were considered in Securities Regulation I. The primary aspects of regulation the course is concerned with are (a) recent developments in issue, (b) capital markets and investment products, (c) enforcement and case law, and (d) Hong Kong in the context of global activities. These topics overlap and so are not mutually exclusive.

Hong Kong’s borders are relatively transparent when it comes to the extent of international participation in Hong Kong’s markets. Many of the activities and transactions undertaken here have an international nexus. In this light, Hong Kong’s regulations will be put in the context of the network of the international regulatory effort. The laws and regulations studied in the first part of this course will be recast in light of the role of IOSCO together with a conversation as to the common objectives, functions and principles that underlie the regulatory approach internationally despite the different regulatory architectures that may implement them. Appreciating the interconnectedness of international regulatory approaches will be relevant to a fuller consideration of subsequent topics in the course.

Recent issues and developments in Hong Kong’s regulatory system will be looked at in some detail. A focus will be to develop a deeper understanding of the factors that have caused such developments including a consideration of the relevant international factors that must be taken in to account and why. Topics covered will include the operation of dark pools, high-frequency trading and the role of liquidity in the stock market and how these relatively new phenomena are to be understood in the context of the proper functioning of a stock market. A closer examination of certain parts of the Securities and Futures Ordinance will also be undertaken.

Specific attention will be had to the current state of regulation as regards the investment product and asset management industry. This will involve a detailed look at the regulatory matters that are of concern to fund managers as well as the matters that need to be considered when creating new investment products, including structured investment products, particularly those directed at the public.

A preliminary overview of derivatives and ISDA documentation will be given by way of an introduction to developing an understanding of the role of OTC derivatives in the marketplace, its connection with the global financial credit crisis, and the decision by G20 leaders to implement regulatory oversight of this market. Developments in Hong Kong as well as other important markets that are engaged in regulatory reform of this market will be reviewed.

A focus of the course will be on the rapidly developing body of caselaw in the Hong Kong courts arising out of the increased activity of the Securities and Futures Commission in bringing matters under the Securities and Futures Ordinance to trial. Regulatory enforcement cases will also be examined and the advantages and disadvantages of each approach will be explored.

1.3 Course teachers

Name E-mail address Office Consultation
Course convenor Syren Johnstone syrenj@hku.hk CCT 513 By email


2.1 Course Learning Outcomes (CLOs) for this course

CLO 1  Critically examine the regulatory response to issues of current importance

CLO 2  Understand the regulatory concerns and requirements as affect the asset management industry and the development of new investment products

CLO 3  Describe and explain the OTC derivatives market, its connection with the global financial marketplace, and regulatory responses to unregulated markets of significance

CLO 4  Understand the approach taken by the SFC in enforcement actions and its increasing role in the courts

CLO 5   Appreciate the relationship between developments in Hong Kong’s regulations and those occurring internationally

2.2 LLM Programme Learning Outcomes (PLOs)

PLO A On successful completion of the curriculum, students should be able to demonstrate a solid understanding of the body of legal knowledge and the capacity to conduct research on, critically analyse and evaluate legal principles, at a level required to meet the standards and expectations of the legal profession and the community at large.

PLO B On successful completion of the curriculum, students should be able to apply their legal knowledge and research skills to practical situations or theoretical challenges, and utilise their comparative understanding of the law and its political, social and cultural contexts to provide original and creative insights to legal problems.

PLO C On successful completion of the curriculum, students should be able to apply the knowledge, lawyering skills and legal reasoning to real and novel situations in life, with a view to resolving issues, problems and disputes within the legal parameters.

PLO D On successful completion of the curriculum, students should be able to demonstrate the ability to present effectively legal arguments in the professional context, as well as conveying and explaining the law effectively to lay clients and members of the larger community.

PLO E On successful completion of the curriculum, students should be able to appreciate the underlying moral values of the law and ethics in the profession and the legal system in the broad social, economic, political and cultural contexts: justice, the Rule of Law, and protection of rights and liberties which form the fabrics of a civilised society, and the importance of upholding these values by the legal community.

PLO F On successful completion of the curriculum, students should be able to develop a strong awareness of social issues and conditions, and utilise analytical abilities and rhetorical advocacy to provide leadership for the betterment of the human community.

2.3 Programme Learning Outcomes to be achieved in this course

CLO 1  ✓
CLO 2  ✓  ✓
CLO 3  ✓

3.1 Assessment Summary

Assessment task Due date Weighting Feedback method* Course learning outcomes
Take home exam TBC 100% 1 1, 2, 3, 4, 5

^ Students are required to pass the exam to be eligible to pass the course.

  *Feedback method (to be determined by course teacher)
1 A general course report to be disseminated through Moodle
2 Individual feedback to be disseminated by email / through Moodle
3 Individual review meeting upon appointment
4 Group review meeting
5 In-class verbal feedback

3.2 Assessment Detail

To be advised by course convenor(s).

3.3 Grading Criteria

Please refer to the following link: http://www.law.hku.hk/course/grading-criteria/


4.1 Learning Activity Plan

Lecture: 3 hours / week for 12 teaching weeks
Private study time: 9.5 hours / week for 12 teaching weeks

Remarks: the normative student study load per credit unit is 25 ± 5 hours (ie. 150 ± 30 hours for a 6-credit course), which includes all learning activities and experiences within and outside of classroom, and any assessment task and examinations and associated preparations.

4.2 Details of Learning Activities

To be advised by course convenor(s).

5.1 Resources

Reading materials: Reading materials are posted on Moodle
Core reading list: TBA
Recommended reading list: TBA

5.2 Links

Please refer to the following link: http://www.law.hku.hk/course/learning-resources/

By the publication of the course profile online, the Faculty deems the student as having been notified of the course requirements.