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Part VII International Securities, Including Markets and Clearing Systems, 20 Global Custody »

Madeleine Yates
From: Financial Markets and Exchanges Law (3rd Edition)
Edited By: Michael Blair, George Walker, Stuart Willey
This chapter draws attention to the service of custody, which in the context of the financial markets, is generally understood as an arrangement in which one entity agrees to hold securities on behalf of a custody client. It reviews the intention of custody, which is for the custody client to remain the owner of the securities and that the securities remain on the custody client's balance sheet. It also describes the service of custody in the matter of English law, in which securities may be held by a custodian as bailee or trustee and will not be available to creditors of the custodian. This chapter talks about the custody aspect of the services provided by Clearstream and Euroclear that falls under the Luxembourg law and Belgian law, respectively. It also mentions the escrow arrangement, in which the escrow agent may hold securities on behalf of one or both parties to the escrow agreement.

Part VI International Markets and Exchanges, 18 Global Custody »

Madeleine Yates
From: Financial Markets and Exchanges Law (2nd Edition)
Edited By: Michael Blair, George Walker, Stuart Willey
18.01 In the context of the financial markets, the service of custody1 is generally understood to mean an arrangement in which one entity (the custodian) agrees to hold on behalf of another (the custody client) securities2 that belong to the custody client. 18.02 The intention is that the custody client remains the owner of the securities, so that the securities remain on the custody client’s balance sheet and, in the event of the insolvency of the custodian, the securities are not available to creditors of the custodian because the securities do not belong to the...

Part VII International Securities, Including Markets and Clearing Systems, 19 International Settlement »

Madeleine Yates
From: Financial Markets and Exchanges Law (3rd Edition)
Edited By: Michael Blair, George Walker, Stuart Willey
This chapter provides an overview of “settlement” as the transfer of ownership or other interest in securities following the agreement to make such transfer in exchange for payment. It discusses settlement through a settlement system, which can only take place if the parties to the trade are members of the relevant settlement system or have arrangements with a system member that can procure settlement on their behalf. It also emphasizes the use of a settlement system that is generally regarded as giving the benefits of speed, efficiency, security, and finality advantages. This chapter talks about international central securities depositories (ICSD), which hold securities issued in a variety of different jurisdictions. It also highlights Clearstream and Euroclear as well—known examples of ICSDs.

Part VI International Markets and Exchanges, 17 International Settlement »

Madeleine Yates
From: Financial Markets and Exchanges Law (2nd Edition)
Edited By: Michael Blair, George Walker, Stuart Willey
17.01 Most settlement following a trade (that is, the transfer of ownership or other interest in securities following the agreement to make such transfer) takes place through a settlement system, whether because this is required by the law governing the relevant securities or the rules of the exchange or other trading system on which the trade was concluded, or because the parties have otherwise chosen to do so. Settlement through a settlement system can take place only if the parties to the trade are members of the relevant settlement system or have arrangements...

Part IV UK Payment and Settlement, 13 UK Settlement »

Madeleine Yates
From: Financial Markets and Exchanges Law (3rd Edition)
Edited By: Michael Blair, George Walker, Stuart Willey
This chapter provides an overview of certain aspects of major settlement systems and clearing systems in the UK. It focuses on CREST, a UK electronic settlement system that is operated by Euroclear UK & Ireland Limited (EUI) in London. It also recounts how CREST became part of the Euroclear group in September 2002, when it merged with Euroclear Bank SA/NV and became its wholly owned subsidiary. This chapter draws attention to LCH Limited, a private limited company incorporated under the laws of England and Wales and was formerly called the London Clearing House Limited. It describes how LCH provides CCP clearing services in respect of trades on a wide range of exchanges, trading platforms, and OTC markets.

Part IV UK Payment and Settlement, 12 UK Settlement »

Madeleine Yates
From: Financial Markets and Exchanges Law (2nd Edition)
Edited By: Michael Blair, George Walker, Stuart Willey
12.01 Trades, whether on- or off-exchange, which require performance in the form of delivery of cash or securities will normally involve settlement, and possibly clearing, through an appropriate system in which both parties (or their custodians) are participants. The following sections provide an overview of certain aspects of a major settlement system and clearing system in the UK. An exhaustive detailed analysis of all system attributes, or the operational and technical requirements, is beyond the scope of this chapter, but further information is available from...