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A [[negotiable instrument]]: 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. | A [[negotiable instrument]]: 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 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 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). | 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). | ||
Also called a [[physical security]] (to distinguish it from a [[synthetic trade|synthetic]] one. | Also called a [[physical security]] (to distinguish it from a [[synthetic trade|synthetic]] one. |