The Law Applicable To Foreign-Related Negotiable Securities Is Not Comprehensive.

< p > < strong > (1) we should distinguish the legal relationship between the two kinds of Rights: < a href= "http://www.91se91.com/news/index_c.asp > > < /a > > /strong > /p >

< p > the rights of negotiable securities include two kinds of Rights: one is the material right of the person holding the securities to the securities themselves, that is, the ownership and other real rights of the securities, it is a kind of property right, and the other is the right to constitute the contents of the securities, that is, the rights embodied in the securities, that is, the right of the securities holder to enjoy or exercise according to the record in the securities, usually called the right of securities.

Therefore, the application of negotiable securities law should distinguish between the real right of the securities itself and the ownership of the rights embodied in the securities.

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< p > first, the real right law of securities should be applied to property rights such as ownership and possession of securities, which is generally the law of the location of securities, or the laws of the state that securities can usually be found.

The applicable law of securities applicable law includes: ownership and security rights of a certain securities, conditions and effects of securities pfer, relationship between securities owners and third parties, mortgage guarantee of securities, etc.

For example, the seventy-fifth Guarantee Law of China stipulates the pledge of rights, and it can set up a pledge on the rights of negotiable instruments such as bills, bonds, bills of lading, stocks and so on, which is a security interest.

The 223rd section of the property law stipulates the pledge of rights, and the rights such as bills, bonds, bills of lading, and stock rights can be pledged.

Which law should be applied to the pledge of rights? The fortieth provision of the law applicable law stipulates: "the right of pledge is applicable to the law of the place where the right of pledge is established."

This provision is very ambiguous. It is not appropriate to use the establishment as the link point.

How to judge the place of establishment? Because the types of rights that can be pledged are various, and their nature is quite different. Some rights pledge needs to be registered, such as stocks, a href= "http://www.91se91.com/news/index_c.asp" > registration > /a >; some rights pledge does not need to register, such as bonds, and when credentials are delivered, they can be set up.

Therefore, the pledge of rights should apply to the applicable law according to the nature of different rights. For the right of pledge that requires registration, the law of the place of registration of rights shall be applied.

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< p > Second, for the "a href=" http://www.91se91.com/news/index_c.asp "> /a < < > in the securities, the applicable law of the securities right shall be applied, that is, the appropriate law governing the legal relationship of the relevant securities.

The applicable law of securities rights determines whether a written document is a negotiable securities, what kind of securities it is, and how to realize the rights of securities.

According to the different types of securities, the rights embodied in securities will also be different.

The rights (securities rights) embodied in negotiable securities are mostly claims, such as the right to request payment of money (bills), also can be expressed as property rights, such as the right to request delivery of goods (bill of lading); and some securities represent a membership right or membership right, such as stock.

Therefore, in accordance with the different nature of rights, the applicable law relating to the right shall be applied to the rights of negotiable securities.

For example, a company buys shares in a French company in France, and later takes the stock back to China and pfers it to B.

The pfer of ownership of the stock shall be judged on the basis of the Chinese law of the place where the pfer occurs, the law of the place where the stock is located, and whether it can enjoy the shareholders' rights of the French company after obtaining the shares shall be determined according to the French law (the company's personal law).

The thirty-ninth section of the law applicable law has introduced a more flexible link factor: the realization of the right or the most closely linked, but how to judge the "realization of the right place"? This link is not clear.

In fact, whether the rights embodied in different securities can be realized depends on the applicable law of the legal relationship related to the right.

For example, when a shareholder is entitled to share rights, the company's personal law (such as the place of registration) is applied to the issue of shares, and the bond rights enjoyed by bondholders are applicable to the applicable law of bonds issuing contracts (such as the laws specified in bonds); the right of bills enjoyed by the holder of a bill is applicable to the law of prompt payment or acceptance of payment.

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< p > < strong > (two) we should consider the applicable law of two kinds of holding system of marketable securities < /strong > < /p >

< p > the traditional securities trading system is a direct holding system, that is, there is a direct legal relationship between the issuer and the securities owner.

Investors either directly hold securities, or as individuals, register paperless securities directly on the issuer's roster of shareholders.

When a negotiable instrument is pferred, the investor will exchange the paper securities to the exchange, deliver the money hand in hand or complete the paction by changing registration on the issuer's register.

Therefore, the pnational securities pactions under the traditional direct holding system involve the conflict of laws in the real right of securities, which can be adjusted through the traditional law of location of the goods, such as the law of the place where the securities certificate is located.

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< p > with the internationalization of the financial market and the expansion of cross-border securities trading volume and the development of modern computer technology, this traditional direct holding system has been gradually replaced by the indirect holding system.

China's securities market is gradually opening to the outside world. In the mode of securities holding, the dual track system of direct holding and indirect holding is currently adopted in China.

For domestic residents investing in B shares, direct holding or direct registration systems are implemented in the same way as A shares; for foreign investors investing in B shares in China, foreign investors investing in China's domestic stock market through QFII (qualified foreign institutional investors) and domestic investors investing in overseas securities markets through QDII (qualified domestic institutional investors), the securities indirect holding mode is adopted.

Under the indirect holding system, the registration, holding, pfer and mortgage of securities are completed through the records of the electronic accounts of middlemen in different countries.

From the actual situation, the issuance and trading of domestic securities have basically been realized without paper. The issuance and trading of securities are completed through the central securities electronic trading system. Any paction of securities is only recorded on the books and can be completed.

This indirect holding mode has considerable advantages in improving the efficiency and risk control ability of securities trading, and better preventing and defusing financial market risks.

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< p > however, the legal choice method of securities trading under the traditional direct holding system can not be applied to securities disposal under indirect holding system.

If we still follow the traditional "location of goods" (location law of securities), how to determine the location of things becomes a difficult problem.

In July 5, 2006, the Hague Convention on private international law adopted the Convention on the law applicable to certain rights held by intermediaries, attempting to unify the conflict rules of pnational pactions of securities under indirect holding system.

The Convention puts forward a special connection point, that is, the location of the relevant middlemen account, and at the same time restrictive autonomy principle is introduced.

That is, the law applicable to the relevant matters stipulated in the Convention is the law of the state in which the account holder and the relevant middlemen agree expressly in the account agreement, or the law of another country clearly specified in the account agreement, but must satisfy the relevant intermediary's branch in the state when the agreement is signed, and the branch shall comply with the conditions stipulated in the Convention.

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< p > it is of great significance to combine the "location of relevant middlemen" with "autonomy of the parties".

The forty-fourth newly implemented law on the application of foreign civil law in the Taiwan area specifically stipulates the applicable law of indirect holding of negotiable securities, mainly adopting the legislative spirit of the above Hague convention, which stipulates that the securities are kept by the custodian of the securities, and the acquisition, loss, disposition or change of the securities rights shall be applicable in accordance with the centralized safekeeping contract; the most tangential law in accordance with the law when the centralized custody contract does not express the applicable law.

The draft of the China International Private Law Association also draws on the practice of the Hague convention. Its forty-ninth second clauses stipulate: "the right of securities that are managed by intermediaries shall apply to the law chosen by the parties.

If a party fails to choose a law, the law of the place where the broker's account is located shall apply.

The author believes that in the absence of a law applicable to the law, in addition to the further clarified by the judicial interpretation of the Supreme People's court, timely accession to the Hague convention can also make up for the lack of legislation at present.

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