The European Commission has published a consultation paper on conflicts of law rules for securities ownership, addressing so-called third party effects of transactions in securities and claims. The consultation relates to the Commission's Capital Markets Union and the objective of creating a single market for capital by facilitating cross-border investment. Obstacles to achieving this objective have been identified. For example, there is legal uncertainty in relation to the governing law for securities ownership where the issuer and investor are based in different Member States and where securities are held by financial institutions in different Member States. Another issue results from the difference in national treatment of third party effects of assignment of debt claims, which complicates their use as cross-border collateral and makes it difficult for investors to price the risk of debt instruments. The European Commission is due to prepare a legislative proposal on determining which national law would apply to securities ownership and to third party effects of the assignment of the claims. The consultation paper considers three categories of assets - book-entry securities, certificated securities and claims - and discusses the disadvantages of the current situation as well as options going forward. The Commission will publish a feedback statement summarizing the responses received to the consultation in due course.

View the consultation paper.

View the consultation response form.