Party Autonomy in International Property Law - Peace Palace Library

D. Assignment; Financial Instruments; Insolvency Law
plementing the Collateral Directive in the Netherlands (which would be
the case in our example) an outright transfer would be possible. Article
3:84(3) of the Dutch Civil Code has been explicitly disapplied in the
legislation implementing the Collateral Directive in the Netherlands,
meaning that it does not impose restrictions on party autonomy. 45
Contrary to the cash collateral scenario, the question of whether mandatory
rules of property law apply to the actual provision of the collateral
is very relevant if securities are to be transferred. Securities are generally
held through chains of intermediaries and there are specific property law
provisions that apply to transferring these securities. Although bearer
certificates (i.e. pieces of paper representing the interest of the investor
against the issuer) were once an innovative way of transferring rights
against the issuers of securities, in today’s world bearer certificates have
become almost irrelevant. Instead, the most important aspect of securities
transfers has become the account the investor has with its intermediary
where the investor is credited with the securities. 46 A securities account
is much like a cash account held with a bank, allowing for the transfer
of fungible securities held in the account by way of book entries. This
means that for a valid collateral arrangement there must be an entry in
the books of the intermediary where the collateral provider (Rock Solid
Bank) holds its securities, debiting the amount of securities specified, and
a corresponding booking in the account of the collateral taker (Alpha
Bank), crediting its account. This booking must comply with the provisions
of property law applicable to the account, which, pursuant to the
private international law requirements of the Collateral Directive as implemented
into Dutch law, will be the property law for the jurisdiction
in which the account is maintained. 47 This means that if the account is
maintained in the Netherlands, there must be a booking that complies
with the Dutch Securities Transfer Act. These bookings are very similar
45
Article 7:55 of the Dutch Civil Code.
46
See Roy Goode, Legal problems of credit and security, 3 rd edition, Sweet &
Maxwell, London 2003 (Goode 2003), § 6-02 for a description of this development.
See also Wood 2007b, §§ 29-052 and 29-053; Matthias Haentjens, Harmonisation
of Securities Law – Custody and Transfer of Securities in European
Private Law, Kluwer Law International, 2007 (Haentjens 2007), pp. 29-41; and
Joanna Benjamin, Interests in Securities, Oxford University Press, Oxford 2007
(Benjamin 2007), §§ 1.78-1.92.
47
Article 16 of the Dutch Property (Conflicts of Law) Act (Wet Conflictenrecht
Goederenrecht), which implements Article 9 of the Collateral Directive.
244
Reinout M. Wibier
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