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Intermediated securities and legal certainty

Micheler, Eva (2014) Intermediated securities and legal certainty. Law Society and Economy Working Paper Series, 10.2139/ssrn.2336889. London School of Economics and Political Science, London, UK.

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Identification Number: 10.2139/ssrn.2336889

Abstract

This contribution shows that holding securities through chains of intermediaries compromises the ability of investors to exercise their rights. This problem is not remedied by Geneva Securities Convention (‘the Convention’ or ‘GSC’). It will be argued in the paper that research should be carried out to determine if a mechanism can be created that enables ultimate investors to hold securities directly. Further work on creating a harmonized set of rules at a functional level will not improve legal certainty, reduce systemic risk or enhance market efficiency. The problems associated with the current framework are a function of the process of intermediation itself. Legal and systemic risk and market efficiency are adversely affected by the number of intermediaries operating in this context. Law cannot help here. Structural reform can. It is worth investigating if a framework can be created that allows for securities to be held directly by ultimate investors.

Item Type: Monograph (Working Paper)
Official URL: http://www.lse.ac.uk/collections/law/wps/wps1.htm
Additional Information: © 2014 The Author, London School of Economics and Political Science
Subjects: H Social Sciences > HF Commerce
H Social Sciences > HG Finance
K Law > K Law (General)
Sets: Departments > Law
Series: Working Papers > LSE Law, Society and Economy Working Paper Series
Date Deposited: 24 Feb 2014 12:08
Last Modified: 24 Feb 2014 12:08
URI: http://eprints.lse.ac.uk/id/eprint/55826

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