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Cross Border Collateral: Legal Risk and the Conflict of Laws
| Content Provider | Semantic Scholar |
|---|---|
| Author | Potok, Richard |
| Copyright Year | 2002 |
| Abstract | This is one of those rare gems in a legal reviewer’s life: a specialist work with an appeal that transcends its speciality; an introduction to a nominally obscure area of law and practice, written with style and panache; a survey on a countryby-country basis that is actually enjoyable to read, as well as authoritative and useful; contributed by a gathering of true stars in its field. What is it all about? In a few words, this book looks at a problem which arises in international banking transactions. The problem is significant. It concerns loans secured over international portfolios of shares and bonds, and arises when the borrower holds the securities not directly from the issuer, but through one or more layers of intermediaries (depositary, trustee, custodian or nominee company). The context of the problem is that what the bank receives by way of security may not be proprietary rights over shares or bonds. Rather, they may receive claims (perhaps proprietary, perhaps contractual) against the intermediary or sub-intermediary who holds an interest in the securities registered in its books, or like claims against a higher level intermediary. If the borrower grants security over its holding in the securities of a single issuer, there may be an opportunity for the bank to trace the nature of the borrower’s interest or its claims against the intermediaries and, often through layers of intermediaries, trace that interest back to the issuer. If the borrower, bank, intermediary and issuer are all located in the same jurisdiction, the answer may be self-evident, familiar and relatively easy to determine. Unfortunately, however, the actual circumstances of a typical transaction are more complicated and deny such simple analysis. For example: • Borrowers more often than not offer an international portfolio of securities, issued from a range of jurisdictions, as security. • Such securities are regularly held in book-entry accounts in sub intermediaries, the original securities having been issued to another intermediary. The sub-intermediaries are not necessarily in the same jurisdiction as the intermediary and issuer. (For Euro-securities, the |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | http://www.unswlawjournal.unsw.edu.au/sites/default/files/19_willis.pdf |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
