INTERMEDIATED SECURITIES. THE IMPACT OF THE GENEVA SECURITIES CONVENTION AND THE FUTURE EUROPEAN LEGISLATION. Eds Pierre-Henri Conac, Ulrich Segna and Luc Thevenoz Cambridge: Cambridge University Press (www.cambridge.org), 2013. xxxv + 432 pp. ISBN 9781107023475. £95.
| DOI | 10.3366/elr.2014.0221 |
| Pages | 305-306 |
| Date | 01 May 2014 |
| Author | Matteo Solinas |
| Published date | 01 May 2014 |
The advent of electronic settlement systems and the growth in cross border investment have profoundly affected the securities markets in recent decades up to the point that it is today commonplace for investors and collateral takers not to hold bonds, shares and other investment securities directly from the issuer, but indirectly through financial intermediaries. It is debated whether this operational change has had a substantial effect in transforming the legal nature of investors' rights in securities and, broadly, how law should treat the bundle of rights and interests in the securities held through an intermediary and the custodial relationship through which they are given effect. The views among national regulators, academics and practitioners have been mixed, between those who claim that language and legal concepts should change with the evolution of financial practice and others who argue that existing law (with minor adaptations) already adequately meets the practical problems of intermediated securities. However, considering the economic importance of cross-border investment securities as financial collateral and the potential risk of a systemic crisis from the failure of interdependent institutions, there is a widespread consensus on the need for a clear and reliable international substantive law regime capable of providing consistent and predictable solutions to specific fact situations.
One authoritative initiative that addresses the need for modernisation and harmonisation of substantive law in the area of intermediated securities is the 2009 UNIDROIT Convention on Substantive Rules for Intermediated Securities (hereinafter, the “Geneva Securities Convention”). Shortly put, the Geneva Securities Convention aims to reduce legal risk both for domestic participants and for investors which settle securities cross-border by promoting “internal soundness” (i.e. clear and simple rules and procedures within each domestic legal framework) and by ensuring “cross border compatibility” (i.e. consistent and predictable outcomes where the laws of one or other legal system are applied to securities settled cross-border).
This book examines selected aspects of the Geneva Securities Convention and their possible impact on future European legislation. It is a collection of thirteen papers presented by academics and legal practitioners at a conference held in Luxemburg in September 2010. The book is divided in two parts. The first one, after an introduction on...
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