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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 might not be security-printed, physical things any more, but their origins as such lives on in the “[[global security]]”, which ''is'' a printed physical thing, on actual paper — usually run off on a word-processor, not [[security-printed]] though — which is signed and given to a [[depositary]] to hold on the [[clearing system]]’s behalf (or on behalf of ''several'' [[clearing system]]s, in which case it is a “[[common depositary]]”). | 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 might not be security-printed, physical things any more, but their origins as such lives on in the “[[global security]]”, which ''is'' a printed physical thing, on actual paper — usually run off on a word-processor, not [[security-printed]] though — which is signed and given to a [[depositary]] to hold on the [[clearing system]]’s behalf (or on behalf of ''several'' [[clearing system]]s, in which case it is a “[[common depositary]]”). | ||
This [[global security]], representing all | This [[global security]], representing all [[medium term note|note]]s issued under that [[ISIN]], is technically the [[instrument]] the [[clearing system]]’s records reflect. On [[execution]] of a bond deal, until relatively recent times, a [[trainee]] would be sent along with the executed [[global note]] to deliver it to the [[common depositary]], a fellow with a green visor, sleeve garters and a permanently malevolent view of humankind who was kept, apparently against his will, in the basement of a building on Queen Victoria Street. | ||
The [[common depositary]] would “authenticate” (counter-sign) the [[global note]] — at which point it would become a “live” [[bearer instrument]] — and put it in an actual vault where it would gather dust awaiting the time at which holders of the [[securities]] it represented might need to convert it into actual physical notes again. That time would be the [[Apocalypse]], so you can expect quite a lot of dust to collect in the meantime. | |||
And it is a detail whose legal significance, in practice, will never affect any practising lawyer — or not until the [[common depositary]]’s vault has hit by a tactical nuclear missile or something — and in that case, even [[Legal eagles|practising lawyers]] will have plenty ''else'' to be worrying about — like packing rifles, tins of spam and so on and heading into the hills — so, if they know what is good for them, they won’t be consulting your old internet chum even at that point to figure out what to do with that stupid [[global note]]. | |||