Comments On The Applicable Law About The Cross-border Intermediated Securities

In recent years, the securities market has been developing a lot. And more and more people pay attention to securities transactions. However, people pay much more attention to them in the front office, less to registration and settlement in the back office, especially the securities of indirect holding system. Securities of indirect holding system means securities in the financial markets are held in electronic book entry form in securities accounts with custodians or depositaries or settlement systems resulting in proprietary rights in or for the delivery or transfer of the securities concerned. This indirect holding system is rooted from the paper crisis in 1960's. In order to tackle with more securities papers, indirect holding system appears. The system is always used in the cross-border securities transactions, which owns characters of dematerialization and immobilization. Different countries have different regulations about the legal characters of investors' rights. But most countries take them as ownership, contractual right or securities entitlement. In order to protect investors, it's suitable to take investors' rights as ownership. In early years of the cross-border indirect holding securities system, lex situs and principle of party autonomy played an important role in traditional legal selections. After that,"look through approach" appeared. It can be used in the direct holding system well, but not the indirect holding system. So the PRIMA came forth. About the sources of the PRIMA are usually thought to be the lex situs, trust law and lex loci delicti. The advantages of the principle are steady, foreseeable and maneuverable. But it can only be used in the property rights in the cross-border indirect holding securities transactions.At present, the regulations about the issue above in the USA and EU are comparatively comprehensive. There's a special chapter to regulate indirect holding system. And the EU has two special directives. At the same time, international organizations make great efforts in the international legislation. The HCCH enacted the Convention on the Law Applicable to Certain Rights in Respect of Securities Held with an Intermediary. And the UNDROIT drafted the Convention on Substantive Rules Regarding Intermediated Securities.The indirect holding system plays a supplementary but important role in our country. But there are seldom regulations about it. This thesis adopts a comparative method to research. It elaborates some views on some basic concepts, history and some legislation in the EU, America and international organizations. It also analyzes the present condition and existing problems. And it suggests that substantive law be perfected at first, and then the conflict law be strengthened in our country.