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Abstract
The need for uniform conflict of laws rules that effectively address the reality of how securities are held and transferred1 today (i.e., by electronic book-entry debits and credits to securities accounts of primarily dematerialized or immobilized securities) has become critical. The last several decades have seen a dramatic increase in the value, number and speed of cross-border securities transactions, facilitated by advances in technology. The value of trades and collateral transactions in government and corporate securities in countries of the Organisation for Economic Co-operation and Development (OECD), for example, has grown to approximately US$ 2 trillion per day.2 Legal uncertainty as to the law governing the perfection, priority, and other effects of transfers imposes significant friction costs on even routine transactions and operates as an important constraint on desirable reductions in credit and liquidity exposures. Increased exposure to unsecured credit risk amplifies systemic risk and the potential proliferation of bankruptcies. Not surprisingly, for more than a decade the international legal and financial community has been emphasizing the need for uniform conflict of laws rules applicable to transactions involving securities held with intermediaries.3
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