The crisis aftermath: new regulatory paradigms (Centre for Economic Policy Research 2012).12 The term 'significant' is defined further in section III. 13 Commission, 'Proposal of 20 July 2011 for a Directive of the European Parliament and of the Council on the access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms and amending Dir 2002/87/EC of the European Parliament and of the Council on the supplementary supervision of credit institutions, insurance undertakings and investment firms in a financial conglomerate' COM(2011) 453 final, 8 (after 'Proposal CRD IV').14 John Armour and others, Principles of Financial Regulation (Oxford, OUP, 2016) 433. 15 The rules in CRD IV also apply to certain types of investment firms as defined by MiFID, see further section III.
Because minority shareholders can be a nuisance for a company, a majority shareholder may want to freeze them out. In general, the approach in the United States towards freeze-outs is more flexible than in the European Union. Law and economics scholarship suggests that a flexible regime for freeze-outs may be beneficial for society, as it addresses a free rider problem and a holdout problem in the market for corporate control. However, these insights are rarely integrated into European legal scholarship. This article endeavours to determine what constitutes an efficient legal framework on freeze-outs through a comparative law and economics approach. First, the legal regime on freeze-outs in the United States is compared with the regime of the Takeover Directive in the European Union and with Dutch law. Then, these legal systems are evaluated on their efficiency. Finally, some suggestions of reform are made for the European Union.
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