The Law Applicable to Bearer Financial Securities

Abstract

The choice-of-law solutions governing the proprietary aspects of bearer financial securities were long marked by great simplicity. When securities were embodied in a paper instrument, applying the law of the place where that paper instrument was located gave the conflict of laws a foreseeable and internationally uniform solution. The dematerialisation of these securities and the advent of distributed ledger technology have rendered that solution obsolete, while the new connecting factors based on the location of the account-keeping intermediary afford no real satisfaction. This article takes stock of these connecting factors and proposes another : that of the securities delivery system operated by the central securities depository.