Local view for "http://purl.org/linkedpolitics/eu/plenary/2006-12-14-Speech-4-229"
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"en.20061214.46.4-229"2
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"Mr President, Commissioner, ladies and gentlemen, the Hague Convention on securities held with an intermediary is intended in particular, as we have just heard, to determine which legislation is applicable to property aspects resulting from the registration of securities held with an intermediary. This text is far from having found a consensus within the European Union, and this justifies the pertinent questions posed by Mrs Berès.
First of all, the Hague Convention respects the autonomous free will of the investor and his intermediary in allowing them to designate the law to which they will be bound in the case of litigation. This is contrary to the law in force in most European countries, which regards the country of location of the securities account as the relevant factor in deciding which law is applicable. In other words, this means that from now on the choice of law would become purely contractual, and this is quite obviously a source of legal uncertainty in this field.
Furthermore – and let us not be naïvely optimistic about this - if we take into account the importance of American credit institutions in this field, it is to be feared that from now on the contractual choice of American law will become the norm. This will not occur without causing a certain number of negative consequences. On the one hand, in terms of activities: there is a great risk that the mastery of American law - which United States institutions obviously possess – would work in their favour and give them a competitive advantage over European institutions. On the other hand, in terms of protecting the investor: if, under most European legal systems, the investor and holder of a security has, in fact, rights with regard to the issuer of the security, under American law he only has rights with regard to the intermediary. Hence there are legitimate concerns in the case of the issuer going bankrupt.
Finally, the provisions of the Convention are such that, as Mrs Berès has said, they would completely bypass any instruments used to combat money laundering, because these are based upon the principle of territorial attachment. Declarations of suspicion must be made to the national authority concerned, that is to say to the authorities of the country in which the intermediary is based. There is therefore a potential conflict between the law which would apply to the security, a law which might insist upon rules of financial confidentiality on behalf of the account holder, and the obligation to declare suspicions about the intermediary. The European Central Bank has expressed its concerns, particularly about the risk of incompatibility between the prudential and stability rules of the financial system and the provisions of the law chosen by the parties. Moreover, it seems difficult to reconcile the principles of most European countries, under which there is a direct relation between the investor and the issuer of securities, with the principles of Anglo-Saxon law under which there is no direct relation between the issuer of securities and the investor.
You said, Mr Barrot, that the process of joining the Hague Convention on securities held with an intermediary was at a standstill: we emphatically want it to stay at a standstill"@en1
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