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Part III Post-Trading Infrastructures, 17 Intermediated Securities: The European Perspective »

Louise Gullifer, Jennifer Payne
From: Financial Market Infrastructures: Law and Regulation
Edited By: Jens-Hinrich Binder, Paolo Saguato
This chapter highlights the role of financial market infrastructures (FMIs) in the holding of securities. The rise of cross-border investments, the expansion of capital markets, and the increasing number of investors in securities contributed to a growing trend in the intermediation in the holding of securities. Despite such trend, domestic law dealing with transferable securities still assumes direct holding as the securities holding paradigm, thus overlooking the full range of changes intermediation brings. The chapter analyses the advantages and disadvantages in directly holding securities compared to holding them through intermediation and suggests that, for most market participants, the advantages outweigh the disadvantages. It also considers the responses of the law in Europe to intermediation, identifying their shortcoming and arguing in favour of legal, regulatory, or market changes, both at a national and supranational level, to ensure the implementation of the advantages of securities intermediation.