Transferable security: Difference between revisions
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A [[negotiable investment]]<ref>I say [[negotiable investment]] not [[negotiable | A [[negotiable investment]]<ref>I say [[negotiable investment|negotiable ''investment'']] not [[negotiable instrument|negotiable ''instrument'']] because a [[cheque]] is a [[negotiable instrument]], and I don't think you would commonly call that a [[transferable security]].</ref>: A [[share]], [[bond]], [[note]], [[warrant]], [[certificate of deposit]] — that kind of thing — evidencing [[indebtedness]] or an [[Equity securities|equity interest]] in an undertaking, in [[bearer]] or [[registered]] form and which the holder may freely [[Title transfer|transfer]] by delivery. These days transferable securities are cleared electronically through clearing systems like [[Euroclear]], [[Clearstream]] and [[DTC]]. The days of security-printed bearer bonds are over. | ||
To "[[securitise]]" an income stream or asset is to convert it into such a form. | To "[[securitise]]" an income stream or asset is to convert it into such a form. | ||
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{{c2|Securities|Collateral}} | {{c2|Securities|Collateral}} | ||
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Revision as of 11:20, 6 April 2018
A negotiable investment[1]: A share, bond, note, warrant, certificate of deposit — that kind of thing — evidencing indebtedness or an equity interest in an undertaking, in bearer or registered form and which the holder may freely transfer by delivery. These days transferable securities are cleared electronically through clearing systems like Euroclear, Clearstream and DTC. The days of security-printed bearer bonds are over.
To "securitise" an income stream or asset is to convert it into such a form.
To be contrasted with indebtedness or exposure in the form of, say, a loan or over-the-counter derivative, where creditor/counterparty cannot easily sell its right to repayment. (Yes, yes, I know it can novate it, or sub-participate it, or indeed securitise it).
Also called a physical security (to distinguish it from a synthetic one.
References
- ↑ I say negotiable investment not negotiable instrument because a cheque is a negotiable instrument, and I don't think you would commonly call that a transferable security.