Reducing risk and costs in cross-border securities transactions: Are Hague and UNIDROIT missing pieces in the puzzle?

Abstract

This paper discusses two of the initiatives that have been embarked upon in an attempt to address the various concerns about legal certainty in today's dematerialised and intermediated securities markets: the Hague Convention on the Law Applicable to Certain Rights and the UNIDROIT draft Convention on Substantive Rules Regarding Intermediated Securities. The paper explores the development of these proposals, and looks at their likely acceptability to the market and their usefulness to practitioners. While political forces may determine whether or not the Hague and UNIDROIT conventions are necessary pieces of the puzzle in achieving legal certainty in the cross-border securities market, some solutions are needed if the cost of cross-border securities holding and settlement is to come down.