The Law Application To The International Securities Held By An Intermediary

Generally speaking, when referring to the transaction of the securities, it is often carried on by the way of transferring the certificate of title. This possession of the certificate is called directly holding system. The most significant character of this system is that the investor and the issuer have direct relationship, and the investor is the entitlement holder. Under the system, the perfection of the investor's right is expressed by registering on the issuer's registers or occupying the certificate of title in fact. Obviously, this traditional delivery mode actually enabled the transaction time-consuming, strenuously, and costly. Moreover, it also risked in losing, stealing and forging. Therefore, a new system which is faster, more convenient and efficient was naturally devised, it was called indirectly holding system. Under the system, the investor occupied the certificate of title through the securities intermediary instead of himself. Apparently, the relationship between the investor and the issuer has been cut off, and the investor's entitlement did not recorded in the issuer's registers any longer. Considering this situation, many counties' civil law has been amended to deal this problem. Nevertheless, when the investor disposes his securities, because of some securities' intermediaries, with the development of global finance market, locating different countries, the conflict arisen from the entitlement naturally happen. More important, the law of conflict in such transaction is deficient. It is unable to really reflect the reality of the market. Traditionally, the conflict law dealing with property is by lex situs or lex rei sitae, which is roughly feasible under the system of directly holding. It whereas can't be suitable with the indirectly holding system. As far as our country is considered, the mode of indirectly holding by intermediary, with the development of economy and capital market, is beginning to exist in a large amount as the legal phenomenon of finance. However, our country does not set up the basic legal system referring to the indirectly holding system, and the relevant legal and policy of completing the network are also problematic. Therefore, this dissertation would like to begin from the characteristic of indirectly holding system, and further analyzing the legal application of holding securities in terms of private international law. The purpose of this paper is using the experience, practice and legislation that the developed countries involve in the securities holding system and studying The Law Applicable to Certain Rights in Respect of Securities Held with an Intermediary to make of our country's relevant conflict law route to come, and finally offering some pointed and effective countermeasures and suggestions.The dissertation is divided into six chapters, about 120,000 words altogether. Its main research method is the approach of taking the theory connection to practice. It firstly explains the theoretical question, and then makes a concrete analysis of new problem and new thing in reality. Meanwhile, it will combine international experience to the realistic problem of our country, and provide the suggestion and reference in the end. The chapter one is the introduction; it is mainly introduce the research background, studying purposes, research methods, and studying innovation etc. The chapter two involves the analysis to the summary of securities holding system. It carries on the foreshadower to the basic conception relating to this paper, and explains objective necessities and relevant factors of the indirectly holding system. Basing on this knowledge, the chapter three theoretically discusses the relationship between the securities transaction under the indirectly holding system, and especially compares the civil law referring to the holder's entitlement to various countries. After that, the chapter four will step from the methods of the traditional application of the law, and gradually introduce a new method, Place of the Relevant Intermediary Approach, to adapt the indirectly holding system. Furthermore, the chapter five will detailedly explain Hague securities conference in order to clearly understand the PRIMA rule. Lastly, chapter six will discuses our country's attitude relating to indirectly holding system. It presents the comparisons between the substantive law and conflict law of our country, and points out some problems existed in the indirectly holding system, and provides some concrete suggestions to resolve these problems.