ABSTRACT

In this chapter, we compare investors’ rights to ever-increasingly complex financial instruments under US and EU securities law, and explore the various differences through the lens of a risk symmetries theory. 1 Complex financial instruments are principally any sort of financial contracts that are usually in form of a debt or a note manufactured by financial institutions such as investment banks and sold to a variety of market participants, such as commercial banks, central banks, pension funds and insurance companies. These instruments are bought and sold like commodities and form the fabric of financial trading around the world. It is a fabric that interlinks parties throughout the world by the very terms and conditions of the contracts, which refer to indices such as stock prices or commodities prices, and by referring to the performance of each other.