The Study Of International Law Of Intermediary Security Holding Mode And Reference To China

There is no doubt that the rights and interests protection is the most important.The patterns of holding securites are meaningful when it comes to the right protection for the ingvestors.At the beginning of the security,Investors hold the security directly and transacted with the voucher physical object,which indicated the investors’ ownership of target and rights and to share out bonus,vote and so on. If the investors wanted to transact the securities,they must transfer the securities to other people and get re-registration on the stock ledger of the issuer. It is called the direct security holding mode that the investors hold the securities all by himself or herself.But this kind of security holding mode was time-consuming and energy-costing and the physical security would be easily got lost and damaged in transactions, which hindered the development of the security market.In order to lower the cost of the transaction and increase the efficiency of settlement,securities are deposited and managed intensively to reach immobilization. As the electronic technology developed, the electronic accounting voucher took the place of the paper securities, which made security transaction completed through the electronic bookkeeping system added or writedowns to finish and transformed the security into paperless mode. At the same time,the way of security holding had transformed from the direct holding mode to the intermediary holding mode.But,the personnel information of the real investor could not be recorded indirectly on the stock lodger of the issuer and the issuer’s securities must be held through the intermediary agency relied upon by the investors, which made the investors unable to claim the right towards the issuer. So intermediary security holding had caused great concern about conflict laws and substantial laws.In order to solve these problems, This thesis tries to expound mainly in four parts.In the first part, This thesis introduces the process and the reason of the evolution from direct holding to intermediary holding, pointing out the securities from immobilization to centralized depository and the paperless mode held by the intermediary agency ultimately. At the same time, it further analyzes the legal relationship between the parties in the intermediary holding mode. The pure ownership relationship between the investor and issuer become diluted due to the intermediary involvement. There is no legal relationship in in the true sense between investor and central securities depositary(CSD) also due to the intermediary involvement; But there is a kind of contract relationship about commission and trust between the investor and the direct middle person.In the second part, this thesis mainly expounds the problem of the establishment of conflict of laws from the perspective of international law. On one hand, it analyzes the embarrassing situation in the intermediary holding mode. On the other hand, it gives a detailed analysis of the significance of “ Convention on the Law Applicable to Certain Rights in Respect of Securities Held with an Intermediary”(“Hague Convention”)from the scope of application to investor protection and a positive evaluation to the PRIMA principle established by the convention.In the third part, this thesis argues that to a large extent it needs to clear the nature of the investor’s rights and interests. This thesis tries to study comparatively the nature of the investor’s rights and interests in combination with world’s major securities market countries and “Convention on Substantive Rules Regarding I ntermediated Security”(“Substantive Law Convention”)of the relevant content. At present, it is mainly focused on the contractual right of claim, the common ownership, the right of trust and the new type of security interest.In the fourth part, as for China’s reality, this thesis systematically expounds the status quo of China’s current intermediary holding mode and pointed that Shanghai-Hong Kong Stock Connect program has become a typical representative of the intermediary holding mode in China, and the potential problems in the protection of the rights and interests of investors. Also it proposes the solution that choosing applicable law should establish the principle of PRIMA in China’s intermediary holdings in cross-board transactions. Also,on the definition of securities equity.,we need to study the “Uniform Commercial Code” of The United States or “Substantive Law Convention” of the new securities equity to determine.In the conclusion of this thesis, the author argues China should actively join the “Hague Convention” and “Substantive Law Convention” or reference in the domestic legislation so as to better protect the rights and interests of the investors in the intermediary holding mode and promote the prosperity and the development of the the security market.