Definitions of securities in legislation outside Russia

Definition of the problem
Definitions of securities in legislation outside Russia
Securities as an economic category and legislative treatment of them

Part IV.
Mistakes in legislation and the role of economic theory переход в другой раздел

"Nobody has yet succeeded in understanding the notion of securities either in life, in science, or in legislation."
G. F. Shershenevich

In common law there is no precise definition of the essence of a security; only unifying concepts of securities are given.

The UK

The term «securities» means stocks, securities and shares (Settled Land Act, 1925, paragraph 117).

As applied to a legal entity, «securities» means all types of shares, share capital, bonds, preferred shares and other securities of a similar type, which are used by legal entities (Transport Act, 1962, paragraph 92).

«securities» is understood to mean shares, share capital, bonds, preferred shares, loan capital, promissory notes, or a share in a collective investment scheme, in accordance with the provisions of the Financial Services Act, 1986, and other types of securities (Stock Transfer Act, 1963, paragraph 4, taking into account the provisions of the Financial Services Act, 1986.

‘The main meaning of the word «securities» is not open to doubt. The word denotes a debt or claim the payment of which is in some way secured. The security would generally consist of a right to resort to some fund or property for payment, although in this case we can exclude other forms of debt (particularly guarantees offered by a physical person). Nevertheless, in any specific case, the use of the word or phrase in its main sense provides for some form of secured liability (Singer V. Williams [1921] AC 41, 49, HNL, per Viscont Cave).

The USA

The term «security» is understood to mean all types of promissory notes, share capital, treasury shares, guarantees, evidence of debt, certificates attesting to the owner’s share in a company’s revenue or participation in any kinds of agreements on division of profit, certificates of the guarantee of other companies by securities, certificates of preliminary agreements or subscription certificates (provisional subscription certificates), transferred shares, investment contracts, voting trust certificates, indivisible share participation relating to rights to extract oil, gas and other useful minerals or all types of interest or means of payment as a whole, known as «debt security», or certificates attesting to the owner’s share in a company’s revenue or his participation in any provisional certificates, receipts, guarantees or rights to subscription or acquisition of any of the aforementioned obligations (Securities Act, 1933, paragraph 2 (1)).

A rather incomprehensible definition of the essence of a security is to be found in the Uniform Commercial Code of the USA (paragraph (c), pages 8–102):

"A security is either documentary or non-documentary. If a security is documentary, the terms «security» and «documentary security» can mean either an intangible property interest, or a document which represents such an interest, or both of these depending on the context. ".

Other countries

Germany’s Civil Code and Trade Code do not contain a clear definition of a security.

Only in the Code of Property Law of the Swiss Confederation is there a more-or-less decent definition of the essence of a security (Article 965):³²

"A security is any document to which a right is related in such a way that one cannot lay claim to it and one cannot transfer it to another party without said document."