ABSTRACT
Global commercial third-party funding has given rise to a multitude of regulatory approaches around the world. However, funders may engage in cross-border regulatory arbitrage by exploiting the holes in and gaps between the regulations within and among the various nations. This Article argues that the global community of nations should articulate a universal approach regarding the behavioral expectations of third-party funders operating transnationally, independent of the local laws regarding the business of funding. It asserts that the key to fostering the ethical development of the third-party funding industry is to develop a globally applicable but locally enforced code of ethics or professional responsibility for the industry. Moreover, a successful regime for funder professional responsibilities would need to be genuinely transnational, transsubstantive, and forum neutral.
This Article briefly examines several existing approaches to regulating third-party funding ethics and professional responsibility and distills some universal principles that can be organized into a Model Code of Conduct for third-party funders. It proposes harmonizing the professional responsibility tenets for the third-party funding industry by devising a transnational, transsubstantive, and forum-neutral Model Code of Conduct for third-party funders. The ideal framework would be clear but not rigid and comprehensive but customizable. The principles in this Code can then be adopted by individual governments domestically, transnational regulatory efforts, and funders who are creating internal governance codes for themselves. This Article provides a starting point for such a Code and concludes with some avenues for further inquiry to bring this idea to fruition.
Sahani, Victoria, Governing Third-Party Funders (November 5, 2021).
First posted 2021-11-24 17:00:56
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