Hello,, please, answer the three Questions(Q1:1000words/Q2;500 words/ Q3:500words)
And use the references under each question.
QUESTION ONE: Margin Lending – 1,000 words
Margin Lending is a major form of financing for speculative investment in equity and funds management markets. It is generally seen as an effective way to accelerate returns on investment portfolios and as a very effective instrument for operating in the capital market. It has been demonstrated over time however that there are a number of critical drawbacks with this practice.
BRIEFLY DEFINE AND EXPLAIN how margin lending operates in the market.
REVIEW the major operators in the Australian market and the fiscal conditions they impose on entrants into this form of financing.
EXAMINE the benefits that can be derived from the use of margin lending and the market conditions that usually exist for these to eventuate.
EXAMINE also the problems that can arise with margin lending practice and the market conditions that usually prevail to bring about these difficulties. BRIEFLY REVIEW the case of either Opes Prime or Storm Financial and DISCUSS the contribution of margin lending to the issues that arose with those organisations.
Inquiry Reports:
• Parliamentary Joint Committee on Corporations and Financial Services: Inquiry into Financial Products and Services in Australia (The Ripoll Report) 2009, Chapters Two, Three and Four.
http://www.aph.gov.au/binaries/senate/committee/corporations_ctte/fps/report/report.pdf
Related Articles:
• Fortune, P., 2001, “Margin Lending and Stock Volatility” 4 New England Economic Review 3: https://www.bostonfed.org/economic/neer/neer2001/neer401a.pdf
• Knight, S., 2008, “Corporate Law: On The Margin: Continuous Disclosure and Margin Lending, 60(4) Keeping Good Companies 222
Related Websites and e-Articles and e-Books:
• McKay, J., 2014, “Is It Time To Consider Margin Lending?”, ASX Group,
http://www.asx.com.au/education/investor-update-newsletter/201402-is-it-time-to-consider-margin-lending.htm
• Brown C. & Davis, K., 2010, “Australia’s Experience in the Global Financial Crisis”: http://www.kevindavis.com.au/secondpages/acadpubs/2009/Brown-Davis_GFC_Kolb_chapter_final2.pdf
• Australian Investors Association: Margin Loans
http://www.investors.asn.au/education/borrowing/margin-loans/
Students must ensure that ALL work is properly referenced.
END QUESTION ONE
cont/…
QUESTION TWO: Documentary Credits – 500 words for
The ‘Principle of Autonomy’ (or ‘Independence Principle’) in documentary credit law provides that the documentary credit ‘is separate from and independent of the underlying contract of sale or other transaction’ even when the contract is specifically referenced in the Credit.
EXPLAIN the ‘Principle of Autonomy’ and the regulatory systems that operate to incorporate it into international capital market law.
BRIEFLY OUTLINE WHY the Principle is important to the integrity of international trade within the documentary credit system.
REFER TO the relevant Articles of the UCP600 and CITE any case law that deals with contractual disputes between trading parties and the circumstances under which the Court has set aside the Principle of Autonomy to deny payment of the Credit.
Students might refer to:
Related Articles:
• Garcia, Roberto L.F., (2012) “The Autonomy Principle of Letters of Credit” 3(1) Mexican Law Review 68
• Enonchong, N., (2006) “The Autonomy Principle of Letters of Credit: An Illegality Exception?” Lloyd’s Maritime and Commercial Law Quarterly 404
• Chatterjee, C. and Lefcovitch, A., (2003) “The Principle of Autonomy of Letters of Credit is Sacrosanct in Nature” 5(1) Journal of International Banking Regulation 72
• McLaughlin, G., (1988) “Letters of Credit and Illegal Contracts: The limits of the Independence Principle” 49 Ohio State Law Journal 1197
Related Books:
• A electronic copy of Wooler, G. (2007) “Legal and practice perspectives on documentary credits under the UCP 600” will be available through BlackBoard under the “Learning Resources” tab.
• Murray, Carole, David Holloway, Daren Timson-Hunt, “Schmitthoff’s Export Trade – The Law and Practice of International Trade” (Sweet and Maxwell, 12 ed, 2012)
(Students should note that a copy of both the UCP600 and UCP 500 is provided at the back of the Wooler reference work provided. References in response to this question should ONLY be made to the UCP600.)
Students must ensure that ALL work is properly referenced.
END QUESTION TWO
cont/…
QUESTION THREE: Australian Capital Market Regulation – 500 words
The Australian Prudential Regulatory System is widely considered to be among the world’s best. With its carefully constructed set of checks and balances, the system has enabled the Australian economy to withstand the effects of several regional and global financial crises.
BRIEFLY DESCRIBE the design and development of Australia’s prudential regulatory system up to the present time.
INCLUDE a brief synopsis of the major players that oversee the capital market in Australia and REFER BRIEFLY to any legislative instruments that empower the regulation of the market.
DISCUSS why it is widely thought that the system has helped to shield the Australian economy over time from financial shocks such as the Asian Financial Crisis and the Global Financial Crisis.
Related Articles:
• Bird, J., 2011, “Regulating The Regulators” 35 Melbourne University Law Review 740
• Black, J., 2006, “Managing Regulatory Risks and Defining the Parameters of Blame: A Focus on the Australian Prudential Regulation Authority” 28(1) Law and Policy 1
• Beckett, I., 2012, “Financial Regulation In Australia Since The GFC” 3 JASSA 20
• Anonymous, “Financial Services Report Australia”, 2014, New York: The Economist Intelligence Unit N.A., Incorporated
Related Websites and e-Articles and e-Books:
• Financial Regulation in Australia:
http://www.australia.gov.au/topics/economy-money-and-tax/financial-regulation
• www.apra.gov.au
• www.asx.com.au
Inquiry Reports:
• Royal Commission on Banking – Napier Report 1935
• Campbell Committee Report 1981
• Martin Inquiry 1984 and 1991
• Wallis Inquiry 1997
END QUESTION THREE
The answer to each question should commence on a new page. Answers should be styled in an essay format that provides descriptive, informational responses to the questions based on the student’s research findings. Students should NOT restrict their research to the sources cited in each of the questions above. Those resources are provided as a starting point for research and additional research material will be required to be referenced in order to achieve high marks.
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