The Federal Intermediated Securities Act (FISA) and the Hague Securities Convention (HSC)

Until 2009. the holding and transfer of securities held through banks and other custodians were governed by traditional legal principles applying to movable,tangible property. But operational and commercial trends in the securities and custody business, such as the intermediation and dematerialization of securities, had been challenging these legal foundations for quite some time. Swiss law had fallen out of step with fundamental changes in technologies and market practices and no longer provided a transparent and predictable framework. In line with extensive discussions in international forums, a consensus emerged in Switzerland that legal certainty must be improved without reducing the flexibility of market practices. On I January 2010, the Federal Intermediated Securities Act of 2008 entered into force simultaneously with the Hague Securities Convention of2006. This commentary provides concise and comprehensive answers to issues arising in connection with the application of the FISA and the HSC. The analysis of the new statutes focuses on relevant practical issues while at the same time providing sound theoretical foundations for the legal concepts used by the Convention and the Act. The authors have paid particular attention to the application of the FISA and the HSC in the international cross-border context, since the holding of intermediated securities across national borders is of particular relevance for the Swiss context. Because the authorship comprises both practicing lawyers and academics, the commeutary addresses both theoretical and practical issues with equal authority