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Building a Single Market for Sustainable Finance in the EU-Mixed Implications and the Missing Link of Digitalisation

Chiu, Iris H-Y; (2022) Building a Single Market for Sustainable Finance in the EU-Mixed Implications and the Missing Link of Digitalisation. In: Avgouleas, E and Marjosola, H, (eds.) Digital Finance in Europe: Law, Regulation, and Governance. (pp. 181-211). Walter de Gruyter GmbH: Berlin, Germany. Green open access

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Abstract

This article critically analyses the EU’s sustainable finance reforms and argues that the interaction between its regulative and enabling aspects creates mixed messages for governance and market-building. The Regulations adopt an incentive-based approach towards market-building for quality sustainable finance, but lower-level products are not shut out. However, if the market responds to quality signals facilitated by regulatory reforms, the article predicts that market-building may be concentrated in passively-managed indexed products which appeal to retail investors. This market may be dominated by large investment intermediaries who may gain an advantage precisely because of more stringent governance imposed on them. The article further argues that retail investors can be helped by policy bridging between sustainable and digital finance, such as adjustments to the legal duty of suitability to cater for investment advice incorporating sustainability preferences, including robo-advisory channels. The connection between digital and sustainable finance can be highly synergistic in attracting both institutional and retail demand.

Type: Book chapter
Title: Building a Single Market for Sustainable Finance in the EU-Mixed Implications and the Missing Link of Digitalisation
ISBN-13: 9783110749410
Open access status: An open access version is available from UCL Discovery
DOI: 10.1515/9783110749472-007
Publisher version: https://doi.org/10.1515/9783110749472-007
Language: English
Additional information: © 2022 Iris H-Y Chiu, published by De Gruyter. This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License (https://creativecommons.org/licenses/by-nc/4.0/).
UCL classification: UCL
UCL > Provost and Vice Provost Offices
UCL > Provost and Vice Provost Offices > UCL SLASH
UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of Laws
URI: https://discovery.ucl.ac.uk/id/eprint/10125919
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