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Law and Systems for Intermediated Securities and the Relationship of Private Property Law to Securities Clearance and Settlement: United States, Japan, and the UNIDROIT Draft Convention


  • Charles W. Mooney, Jr.

    (Visiting Scholar, Institute for Monetary and Economic Studies Bank of Japan (Fall 2006), Charles A. Heimbold, Jr. Professor of Law, University of Pennsylvania Law School.)


This paper compares the private law of the United States and Japan that applies to the holding of securities through intermediaries, such as securities firms and banks. In particular, it focuses on Articles 8 and 9 of the United States Uniform Commercial Code and the Japanese Book-Entry Transfer Act. That act is now in effect in Japan for most securities other than equity securities and it will become operative for equities in January 2009. The paper also examines the proposed UNIDROIT Draft Convention on Substantive Rules regarding Intermediated Securities. The Convention will be discussed at a diplomatic conference to be held in Geneva in September 2008, with the goal of adopting a final text. It considers the Convention on alternative assumptions that the non-Convention law is the law of the United States or the law of Japan. It generally concludes that the functional approach (i.e., result- oriented, as opposed to doctrine- or theory-oriented) adopted by the Convention is successful and appropriate. Finally, the paper considers differences between United States law and Japanese law in the context of similarities and differences in the principal systems and practices for clearance and settlement of securities transactions in the United States and Japan.

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  • Charles W. Mooney, Jr., 2008. "Law and Systems for Intermediated Securities and the Relationship of Private Property Law to Securities Clearance and Settlement: United States, Japan, and the UNIDROIT Draft Convention," IMES Discussion Paper Series 08-E-07, Institute for Monetary and Economic Studies, Bank of Japan.
  • Handle: RePEc:ime:imedps:08-e-07

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    References listed on IDEAS

    1. Amadou N Sy & Jorge A Chan-Lau, 2006. "Distance-to-Default in Banking; A Bridge Too Far?," IMF Working Papers 06/215, International Monetary Fund.
    2. Kimie Harada & Takatoshi Ito & Shuhei Takahashi, 2010. "Is the Distance to Default a Good Measure in Predicting Bank Failures? Case Studies," NBER Working Papers 16182, National Bureau of Economic Research, Inc.
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    book-entry; central securities depository; intermediary; securities; securities account; security interest; settlement;

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