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Clearing system liens

In these modern, dematerialised times, the securities in a clearing system — that is, pretty much all securities — exist only as entries in a ledger maintained by the clearing system. The individual securities are no longer — have not for decades been — security-printed, physical things. (See common depositary for more about this: it is a topic that thrills a certain type and drives others to distraction.)

In any case, like all good intermediaries, the clearing system gets fees from participants for being a clearing system. To guard against non-payment of these fees, it keeps a lien on all global securities it holds. Would it — could it — ever exercise that lien, given that the securities only exist as a practical thing inside its own accounts, and cannot really therefore be taken out of them? Doubtful. In practice, it will just deduct its fees out of any sale proceeds of securities sales flowing into your account (Cash movements all take place inside its systems too, needless to say.)

Now all this sits a long way down the stack of turtles that makes up the modern metaphysical financial system — almost so deep as to be beyond the paranoid articulations of an ISDA ninja — but, as you can see, not quite.