Intermediated Securities and Legal Certainty

28 Pages Posted: 13 Feb 2014

See all articles by Eva Micheler

Eva Micheler

London School of Economics - Law School

Date Written: February 10, 2014


This contribution shows that holding securities through chains of intermediaries compromises the ability of investors to exercise their rights. This problem is not remedied by Geneva Securities Convention (‘the Convention’ or ‘GSC’). It will be argued in the paper that research should be carried out to determine if a mechanism can be created that enables ultimate investors to hold securities directly. Further work on creating a harmonized set of rules at a functional level will not improve legal certainty, reduce systemic risk or enhance market efficiency. The problems associated with the current framework are a function of the process of intermediation itself. Legal and systemic risk and market efficiency are adversely affected by the number of intermediaries operating in this context. Law cannot help here. Structural reform can. It is worth investigating if a framework can be created that allows for securities to be held directly by ultimate investors.

Suggested Citation

Micheler, Eva, Intermediated Securities and Legal Certainty (February 10, 2014). LSE Legal Studies Working Paper No. 3/2014, Available at SSRN: or

Eva Micheler (Contact Author)

London School of Economics - Law School ( email )

Houghton Street
London WC2A 2AE, WC2A 2AE
United Kingdom

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