Part VII International Securities, Including Markets and Clearing Systems, 20 Global Custody

This chapter draws attention to the service of custody, which in the context of the financial markets, is generally understood as an arrangement in which one entity agrees to hold securities on behalf of a custody client. It reviews the intention of custody, which is for the custody client to remain the owner of the securities and that the securities remain on the custody client's balance sheet. It also describes the service of custody in the matter of English law, in which securities may be held by a custodian as bailee or trustee and will not be available to creditors of the custodian. This chapter talks about the custody aspect of the services provided by Clearstream and Euroclear that falls under the Luxembourg law and Belgian law, respectively. It also mentions the escrow arrangement, in which the escrow agent may hold securities on behalf of one or both parties to the escrow agreement.

Part VII International Securities, Including Markets and Clearing Systems, 19 International Settlement

This chapter provides an overview of “settlement” as the transfer of ownership or other interest in securities following the agreement to make such transfer in exchange for payment. It discusses settlement through a settlement system, which can only take place if the parties to the trade are members of the relevant settlement system or have arrangements with a system member that can procure settlement on their behalf. It also emphasizes the use of a settlement system that is generally regarded as giving the benefits of speed, efficiency, security, and finality advantages. This chapter talks about international central securities depositories (ICSD), which hold securities issued in a variety of different jurisdictions. It also highlights Clearstream and Euroclear as well—known examples of ICSDs.

THE REACTION OF THE INTERNATIONAL SECURITIES MARKET ON THE CORONAVIRUS IN CHINA

The article presents the main global securities markets and analyzes the changes in stock indexes after the coronavirus outbreak in China. In conclusion, the opinion of analysts on the dynamics of the securities market in Russia is formulated

Part II The New EU Prospectus Rules, 17 The Prospectus Regime and Brexit

This chapter discusses the third country regime against the backdrop of Brexit. It explains that, post-Brexit, it will no longer be possible to use a UK prospectus for distribution of securities in the EU. However, since the majorities of securities offered on the UK markets are in fact sold to UK or international (non-EU) investors, it is difficult to know whether the consequence of this will be an increase in EU prospectus offerings or a decrease. The chapter notes that in reality the point is that there is a relatively well-established prospectus orthodoxy in the international securities markets, and as long as the EU regime remains closely aligned with that international orthodoxy, it is likely that the incremental cost of adding an EU limb to a global offering will remain acceptable. However if EU disclosure standards diverge from international standards, the issue will become more acute, and issuers may find themselves having to choose between a domestic EU offering and an international offering.

Animating the Market

This chapter looks at how to ensure that social cues are present on the trading floor. It introduces the sales desk at International Securities, along with its convivial work atmosphere. Sales traders did not buy or sell stocks for the bank's proprietary account but executed trades for their customers instead. Their skills and resources, including humor, excitement, charisma, or business contacts at the stock exchanges, were different from and complementary to those of other traders on the floor. In the course of the chapter's observations, the sales traders appeared to be engaged in a number of seemingly controversial practices such as earning soft-dollar commissions, crossing the Chinese Wall, or pulling pranks on accidental callers to the bank's phone line. By examining the ways in which these sales traders adopted, modified, and conceived of these practices, the chapter reveals their practiced, as opposed to stated, morality.

First Impressions

This chapter situates the study within the original sociology of finance. It introduces the core ethnographic breakdown that motivated this project. While existing studies described trading floors as loud, stressful, and chaotic, the chapter describes one trading room at International Securities in 1999 as quiet and orderly. The reason for such disparity was the introduction of information technology during the 1990s, which had replaced loud oral communication as the key information exchange mechanism. This change in turn led Bob, the manager of the floor, to rethink the trading room as a space for interpreting and debating economic news and events.

Managers

This chapter shifts the focus from the traders to the managers who supervised them. It considers in particular the issue of risk management through three different managers: the head of Risk Management at International Securities, a senior trader who was in charge of Todd's desk, and a manager whom Bob had tasked with promoting collaboration across desks. The challenges and difficulties these three individuals encountered revealed the organized and to some extent hierarchical nature of professional trading. It also highlights the need for an organizational lens. The chapter's observations of these managers also point to a difficult tension between technical and managerial expertise.