What effect does the Hague Securities Convention have on perfection by filing?
— Part Four of Four —
The Convention does not affect perfection of a lien by taking physical possession of the securities. However, the Convention may affect perfection of a lien by filing, including the place where the security interest or other lien implementation document must be filed. Under the relevant provision of the UCC (§ 9-305) the jurisdiction of the intermediary, NOT the borrower determines the effect of perfection and the priority of the security interest (a lien). » Read More
What is required to be a governing law?
— Part Three of Four —
Two things are required. First, the choice should be expressly made. If an express choice is not made, there are a series of fallback rules under the Convention, but clearly the far better approach is to make an express choice.
Second, the jurisdiction whose law is chosen must be a jurisdiction (i.e.» Read More
What do these provisions accomplish?
— Part Two of Four —
The cited provisions are choice-of-law provisions that select the governing law for the intermediary account agreement, which under the Hague Securities Convention will then also dictate the governing law for other issues regarding the securities, enumerated in Article 2(1) of the Convention, such as perfection of liens and priority of interests. » Read More
Lending Against Securities in the U.S. After April 1, 2017
— Part One of Four —
The Hague Securities Convention, which goes into effect in the United States on April 1, 2017, will have significant impact on the law applied to all transactions – past and future – collateralized by securities held by an intermediary (e.g. a brokerage firm, bank trust department, etc.), where there is any international aspect to the security, such as the nationality of the security issuer, security holder, intermediary, party to the security transfer, adverse claimant, or the location of the security certificates.» Read More
The Department of the Treasury has proposed requirements for SEC registered investment advisers to establish anti-money laundering programs. The proposed rules would require a firm’s anti-money laundering program to be reasonably designed to prevent the firm from being used for money laundering or terrorist financing activities and to achieve compliance with provisions of the Bank Secrecy Act that would also become applicable to investment advisers.» Read More