Feel free to improve the article, but do not remove this notice before the discussion is closed. For more information, see the guide to deletion. Find sources:"Interest in securities"–news·newspapers·books·scholar·JSTOR%5B%5BWikipedia%3AArticles+for+deletion%2FInterest+in+securities%5D%5DAFD
An interest in securities is the asset of a client for whom an intermediary holds securities on an unallocated basis, commingled with the interests in securities of other clients. The distinction between securities and interests in securities is often overlooked in practice.
Interests in securities are always intangible. The only evidence of them comprises electronic records. Interests in securities confer property rights in relation to the underlying securities, and in some cases these underlying securities comprise tangible bearer instruments. However, this does not mean that interests in securities are themselves tangible. They are unallocated, and therefore do not attach to any tangible asset.
Legal consequences of being intangible
An important legal consequence of the intangible nature of interests in securities is that they, as choses in action, are incapable of possession at common law.
Interests in securities cannot be the subject of bailment, since the essence of bailment is the delivery of possession without the delivery of title. The rise of interests in securities therefore requires the traditional custodial relationship to be reappraised.
A pledge cannot take effect in relation to interests in securities. A purported pledge may be recharacterised as a floating charge in some circumstances, which in turn may be void for want of registration.
Intangible assets such as interests in securities also cannot be negotiable instrument, and there is an issue of whether this reduces security of transfer in securities markets. he "holder in due course" of a traditional negotiable instrument (very broadly, the good faith purchaser) takes the instrument free from prior claims, and can get good title from a thief.
Related Research Articles
Personal property is property that is movable. In common law systems, personal property may also be called chattels or personalty. In civil law systems, personal property is often called movable property or movables—any property that can be moved from one location to another.
A security is a tradable financial asset. The term commonly refers to any form of financial instrument, but its legal definition varies by jurisdiction. In some countries and languages people commonly use the term "security" to refer to any form of financial instrument, even though the underlying legal and regulatory regime may not have such a broad definition. In some jurisdictions the term specifically excludes financial instruments other than equities and fixed income instruments. In some jurisdictions it includes some instruments that are close to equities and fixed income, e.g., equity warrants.
A service is an act or use for which a consumer, firm, or government is willing to pay. Examples include work done by barbers, doctors, lawyers, mechanics, banks, insurance companies, and so on. Public services are those that society as a whole pays for. Using resources, skill, ingenuity, and experience, service providers benefit service consumers. Services may be defined as intangible acts or performances whereby the service provider provides value to the customer.
In economics and law, fungibility is the property of a good or a commodity whose individual units are essentially interchangeable. In legal terms, this affects how legal rights apply to such items. Fungible things can be substituted for each other; for example, a $100 bill (note) is considered entirely equivalent to twenty $5 bills (notes), and therefore a person who borrows $100 in the form of a $100 bill can repay the money with twenty $5 bills. There is no requirement to return the same $100 bill. Non-fungible items are not substitutable in the same manner.
Ownership is the state or fact of legal possession and control over property, which may be any asset, tangible or intangible. Ownership can involve multiple rights, collectively referred to as title, which may be separated and held by different parties.
In finance, valuation is the process of determining the value of a (potential) investment, asset, or security. Generally, there are three approaches taken, namely discounted cashflow valuation, relative valuation, and contingent claim valuation.
In economics, goods are items that satisfy human wants and provide utility, for example, to a consumer making a purchase of a satisfying product. A common distinction is made between goods which are transferable, and services, which are not transferable.
A negotiable instrument is a document guaranteeing the payment of a specific amount of money, either on demand, or at a set time, whose payer is usually named on the document. More specifically, it is a document contemplated by or consisting of a contract, which promises the payment of money without condition, which may be paid either on demand or at a future date. The term has different meanings depending on its use in the application of different laws and depending on countries and contexts. The word "negotiable" refers to transferable and "instrument" refers to a document giving legal effect by the virtue of the law.
Hypothec, sometimes tacit hypothec, is a term used in civil law systems or mixed legal systems to refer to a registered non-possessory real security over real estate, but under some jurisdictions it may sometimes also denote security on other collaterals such as securities, intellectual property rights or corporeal movable property, either ships only as opposed to other movables covered by a different type of right (pledge) in the legal systems of some countries, or any movables in legal systems of other countries. Common law has two main equivalents to the term: mortgages and non-possessory liens.
In finance, a floating charge is a security interest over a fund of changing assets of a company or other legal person. Unlike a fixed charge, which is created over ascertained and definite property, a floating charge is created over property of an ambulatory and shifting nature, such as receivables and stock.
In finance, a security interest is a legal right granted by a debtor to a creditor over the debtor's property which enables the creditor to have recourse to the property if the debtor defaults in making payment or otherwise performing the secured obligations. One of the most common examples of a security interest is a mortgage: a person borrows money from the bank to buy a house, and they grant a mortgage over the house so that if they default in repaying the loan, the bank can sell the house and apply the proceeds to the outstanding loan.
Chose is a term used in common law tradition to refer to rights in property, specifically a combined bundle of rights. A chose is the enforcement right which a party possesses in an object. The use of chose extends from the English use of French within the courts. In English and commonwealth law, all personal things fall into one of two categories, either choses in action or choses in possession. English law uses chose to refer to a bundle of rights, traditionally relating to property which may be utilised in certain circumstances. Thus, a chose in action refers to a bundle of personal rights which can only be enforced or claimed by a chose-holder bringing an action through the court to enforce the action. In English law, this category is enormously wide. This is contrasted with a chose in possession which is a bundle of rights which can be enforced or acquired by taking physical possession of the object. This may be, for example, a legal mortgage. Both choses in possession and choses in action represent separate proprietary interests. What differs between each is the method in which each chose may be enforced. This is dependent on the possessory nature of the reference object.
Australian property law, or property law in Australia, are laws that regulate and prioritise the rights, interests and responsibilities of individuals in relation to "things" (property). These things are forms of "property" or "rights" to possession or ownership of an object. Property law orders or prioritises rights and classifies property as either real and tangible, such as land, or intangible, such as the right of an author to their literary works or personal but tangible, such as a book or a pencil. The scope of what constitutes a thing capable of being classified as property and when an individual or body corporate gains priority of interest over a thing has in legal scholarship been heavily debated on a philosophical level.
Secured transactions in the United States are an important part of the law and economy of the country. By enabling lenders to take a security interest in collateral, the law of secured transactions provides lenders with assurance of legal relief in case of default by the borrower. The availability of such remedies encourages lenders to lend capital at lower interest rates, which in turn facilitates the free flow of credit and stimulates economic growth.
In law, perfection relates to the additional steps required to be taken in relation to a security interest in order to make it effective against third parties or to retain its effectiveness in the event of default by the grantor of the security interest. Generally speaking, once a security interest is effectively created, it gives certain rights to the holder of the security and imposes duties on the party who grants that security. However, in many legal systems, additional steps --- perfection of the security interest --- are required to enforce the security against third parties such as a liquidator.
A pledge is a bailment that conveys possessory title to property owned by a debtor to a creditor to secure repayment for some debt or obligation and to the mutual benefit of both parties. The term is also used to denote the property which constitutes the security. The pledge is a type of security interest.
Conversion is an intentional tort consisting of "taking with the intent of exercising over the chattel an ownership inconsistent with the real owner's right of possession". In England and Wales, it is a tort of strict liability. Its equivalents in criminal law include larceny or theft and criminal conversion. In those jurisdictions that recognise it, criminal conversion is a lesser crime than theft/larceny.
In financial accounting, an asset is any resource owned or controlled by a business or an economic entity. It is anything that can be used to produce positive economic value. Assets represent value of ownership that can be converted into cash . The balance sheet of a firm records the monetary value of the assets owned by that firm. It covers money and other valuables belonging to an individual or to a business.
The price-to-book ratio, or P/B ratio, is a financial ratio used to compare a company's current market value to its book value. The calculation can be performed in two ways, but the result should be the same. In the first way, the company's market capitalization can be divided by the company's total book value from its balance sheet. The second way, using per-share values, is to divide the company's current share price by the book value per share. It is also known as the market-to-book ratio and the price-to-equity ratio, and its inverse is called the book-to-market ratio.
Financial law is the law and regulation of the commercial banking, capital markets, insurance, derivatives and investment management sectors. Understanding financial law is crucial to appreciating the creation and formation of banking and financial regulation, as well as the legal framework for finance generally. Financial law forms a substantial portion of commercial law, and notably a substantial proportion of the global economy, and legal billables are dependent on sound and clear legal policy pertaining to financial transactions. Therefore financial law as the law for financial industries involves public and private law matters. Understanding the legal implications of transactions and structures such as an indemnity, or overdraft is crucial to appreciating their effect in financial transactions. This is the core of financial law. Thus, financial law draws a narrower distinction than commercial or corporate law by focusing primarily on financial transactions, the financial market, and its participants; for example, the sale of goods may be part of commercial law but is not financial law. Financial law may be understood as being formed of three overarching methods, or pillars of law formation and categorised into five transaction silos which form the various financial positions prevalent in finance.
This page is based on this Wikipedia article Text is available under the CC BY-SA 4.0 license; additional terms may apply. Images, videos and audio are available under their respective licenses.
