Wertpapierrecht zwischen Schuld- und Sachenrecht

The book analyses the law of investment securities. It addresses the legal problems arising out of the fact that investment securities, which used to be transferred by means of paper documents only, are now being transferred and held by means of electronic instructions and book entries. The book examines Austrian, German, English, and Russian law. In Austria and Germany, investment securities are issued in the form of negotiable instruments. They are not transferred according to the rules governing the assignment of rights, but according to the rules governing the transfer of tangible moveables. Issuing investment securities in the form of negotiable instruments has to principal advantages. The first one is that a bona fide purchaser acquires title even though the vendor did not have authority to sell. The second advantage is that a bona fide purchaser acquires title free of equities that may have arisen out of the original allotment or an agreement entered into between the debtor and a previous creditor. According to orthodox theory, the rules governing negotiable instruments can only be applied because of the existence of a paper document which materialises the rights underlying the securities. Even though paper certificates have become immobilised, and investment securities are nowadays transferred through book entries, orthodox theory still analyses the transfers in terms of possession. A theory of constructive possession is applied. Investors are deemed to have possession of the paper documents stored with a central depository even though there is no direct relationship between individual investors and individual documents. The book challenges the orthodox analysis. It concludes that the rules governing investment securities do not apply because of the existence of paper documents evidencing the rights, but because of the ambulatory nature of the rights underlying the security. Historically, the rules developed in order to provide for an efficient means of transfer of rights which were issued in order to circulate in a liquid investor market. There is no need to apply a theory of constructive possession. The rules on investment securities can be applied notwithstanding the fact that transfers have become dematerialised. They are to be applied by analogy to transfers effected through a book entry system. The conclusions reached on Austrian and German law are supported by an analysis of English and Russian law. In English law investment securities are choses in action. They are transferred by means of novation. Furthermore, the doctrine of estoppel protects the bona fide purchaser against unauthorised transfers and equities. The common law has developed special rules in order to enhance the transferability of rights which are issued to circulate in the capital market. Russian law, on the other hand, has developed a hybrid system. Russian law contains a number of rules that originate from German law and a number of other rules that originate from the common law world. The analysis of such a hybrid system leads to the conclusion that the ambulatory nature of investment securities justifies the application of special rules governing the legal regime according to which they are transferred and held.