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Full-Text Articles in Law
Heart Of Darkness: The Problem At The Core Of The Us Proxy System And Its Solution, David C. Donald
Heart Of Darkness: The Problem At The Core Of The Us Proxy System And Its Solution, David C. Donald
David C. Donald
Voting rights are a shareholder’s main legal channel to exercise control internally over the company in which she invests her savings. Under the corporate law of the US states, a shareholder is someone registered on the stockholders’ list, not a person who has title to shares. When in the 1970s transferring paper certificates became impossible on high-volume markets, Congress ordered that the market’s securities be put into the vaults of a central depository and that claims against the depository’s accounts be transferred rather than the shares themselves. Once this was done, however, issuers no longer knew who owned their shares; …
Regulatory Failures In The Design Of Securities Settlement Infrastructure, David C. Donald
Regulatory Failures In The Design Of Securities Settlement Infrastructure, David C. Donald
David C. Donald
Nearly all transactions in listed securities on the US capital markets are settled through a securities settlement infrastructure that generates extensive negative externalities for issuers and securityholders. This model is still advocated by regulators and market structure experts; it is an intermediated structure originally designed for depositing paper certificates in the accounts of a depository to allow book entry transfers of claims on the deposited certificates. The structure dates back at least to 1873. It accelerates transfer by short circuiting "endorsement", "delivery" and "cancellation" of certificates, as all securities are and remain registered in the name of a single entity …