учебный год 2023 / Haentjens, Harmonisation Of Securities Law. Custody and Transfer of Securities in European Private Law

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Direct and indirect representation

Although representation can thus be construed in a number of instances to classify an intermediary’s administration of Wge pools, the precise classification of representation in the said instances is a matter of debate. UNIKEN VENEMA for example, has claimed that representation by an intermediary classifies as direct representation (onmiddellijke vertegenwoordiging), but it is argued here that a classification as indirect representation (middellijke vertegenwoordiging) would be more appropriate.124

Under the generally accepted definition of direct representation, an agent acts in his principal’s name.125 Although the agent is not required to name his principal explicitly, the agent’s counterparties should be able to infer the principal’s identity from the circumstances, possibly at a later moment in time.126 But when an intermediary represents its clients, their identity is never to be revealed to third parties. In the case of delivery of securities into the Wge system for example, the depositing investor’s identity is not very likely to become known to the existing co-owners of the participant pool, nor vice versa. With regard to the transfer of securities by an intermediary to the CSD, the government stated that ‘The CSD has nothing to do with the identity of an intermediary’s clients, nor with the composition of their securities portfolio.’127

It has been argued, on the other hand, that from the Kas-Associatie/Drying Corp. case, it follows that an intermediary’s representation cannot be indirect, as the Hoge Raad held that under art. 3:110 BW, a co-owner of a securities pool cannot indirectly make a third party co-owner of the same pool.128 But the case does not have any influence, it is submitted, on the classification of an intermediary’s representation, because that case concerned the (alleged) representation by an accountholder of its client, and

124UNIKEN VENEMA (2003), 52.

125BLOEMBERGEN ET AL. (2001), no. 82.

126DU PERRON (1999), 40 and 49. Cf. HR 26 May 2000, NJ 2000, 442 (Weld-Equip/Van de

Pest)(ann. SCJJK), where the Hoge Raad held that a legal act performed for a principal who had yet to be named, must be considered an act performed in the agent’s own name, if the principal cannot later be identified with certainty; see DE VRIES (2003), 525-526

127Explanatory Notes to the Draft Wge TK 1975-1976, 13 780, no. 3, 15. The government’s argument is unfamiliar to other countries. Art. 151 of the Securities Law of the People’s Republic of China, for example, even requires that the CSD informs third parties, such as issuing institutions, about the identity of investors.

128Thus, Kas-Associatie/Drying Corp. implies that the delivery of a Wge entitlement cannot be effected by indirect representation. Cf. MEIJER (1999), 180 and VAN SETTEN (1998), 326. In Amsterdam District Court, 20 February 1985, NJ 1986, 113 (Hadisantoso/Flesseman et al.), the court held that a Wge entitlement was deliverable without any formal requirements; that decision can now be considered to have been overruled by Kas-Associatie/Drying Corp. Cf. RANK-BERENSCHOT (1998), 164-167 and VAN DELDEN (1988), 55.

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representation by an intermediary of its accountholders must be distinguished.129

7.4 SECURITIES TRANSFERS

7.4.1 Introduction

One of the Wge’s most important objectives was to create a custody system that would facilitate the easy transfer of securities by book-entry. Whilst the VABEF system enabled the transfer of securities by book-entry only between clients of the same financial institution, the Wge’s multi-tiered, pyramid-shaped structure made giro transfer between all accountholders possible.130

The Wge classifies a transfer of securities as the transfer of (a part of) an accountholder’s co-ownership interest in a Wge pool to another accountholder.131 Such a transfer of ownership is perfected upon the credit entry in the transferee’s securities account; art. 17 and 41 Wge.132 A credit balance on a securities account is thus a constitutive element of an accountholder’s entitlement, because Dutch general private law does not recognise the creation of a property right prior to delivery (traditio transfer regime). Consequently, the credit entry in a transferee’s account both represents the transfer of ownership, and makes that transfer effective against third parties.

However, the classification of a Wge transfer in general private law terms and its consequences are subject to doctrinal debate. Some authors have claimed that a securities transfer classifies as a transfer of ownership as defined in art. 3:84 BW.133 Under that view, arts. 17 and 41 Wge prescribe a specific method of delivery, but the other requirements laid down by art. 3:84 BW for a valid transfer, viz. a valid title and a power of disposal

129Contra UNIKEN VENEMA (2003), 52-54. Accord W. SNIJDERS and AVEZAAT in AVEZAAT

(2002), 18-19.

130Cf. supra s. 7.1.3.

131Of course, an accountholder can transfer individual securities, i.e. parts of his coownership interest in a participant pool, provided these parts are in proportion to the number of securities to which the accountholder is entitled. Thus, if an accountholder is entitled to three securities, he cannot dispose of a quarter of his share in a participant pool; art. 16(1) second sentence Wge. This principle prevents the creation of fractions of securities, but it presumably also leads to the identification of securities with a co-ownership interest in a pool.

132Art. 17 Wge reads: ‘Delivery of a share in a participant pool occurs through a credit entry in the name of the transferee in the part of the intermediary’s records that is intended for that purpose.’ Art. 41(1) Wge provides similar rule for transfer via the giro pool.

133E.g. MIJNSSEN (1975), 207, VINCENT (1997), 44 and 46, BLOM (1999), 377 and VAN DIJK

in EISMA ET AL. (2002), 121. These authors mostly base their position on the parliamentary proceedings, notably the Explanatory Notes to the Draft Wge.

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(beschikkingsbevoegdheid), as well as the requirement of a proprietary agreement (goederenrechtelijke overeenkomst), remain applicable.134 It is submitted, however, that that position overlooks some important contractual and practical aspects of the transfer of securities by book-entry.135

7.4.2 Object and moment of transfer

Pursuant to arts. 17 and 41 Wge, a securities transfer is effectuated through the transfer of a co-ownership interest (share) in a Wge pool, rather than through the transfer of the securities themselves. Accordingly, the KasAssociatie/Drying Corp. case showed that a Wge share and its object must not be identified, and the rules on the transfer of co-ownerhsip interests must therefore be applied, rather than the rules on the transfer of securities. It is submitted, however, that Wge shares represent a combination of rights that cannot be transferred as provided for in art. 3:84 BW.

Close analysis of a securities transfer via the CSD shows that a transferee acquires a different entitlement against his account provider than the transferor alienated. Because the transferor’s and transferee’s immediate account providers are not the same, and an accountholder’s entitlement can primarily be asserted only against his own account provider, the entitlements of transferor and transferee against their account providers necessarily differ accordingly.136 BLOM, on the other hand, has argued that accountholder interests are proprietary in nature and that transfers of Wge shares are therefore governed by art. 3:84 BW.137 Although he acknowledges the contractual aspects of the Wge entitlement, he emphasises its proprietary character. Yet it is submitted that the inseparability of contractual and proprietary rights results in the non-transferability of Wge shares, and thus in the non-applicability of art. 3:84 BW.138

In addition, the moment of transfer of securities by book-entry indicates the non-applicability of art. 3:84 BW. Under art. 3:84 BW, a transferor remains the entitlement holder with full power of disposal until the delivery of the transferred assets has been completed. If art. 3:84 BW would apply to a securities transfer, a transferor would then remain empowered to dispose of his securities until the credit entry in the transferee’s securities account

134 Accord Advisory Opinion of the Advocate General of the Supreme Court in KasAssociatie/Drying Corp., see supra, s. 7.3.4.

135Accord SCHOORDIJK (1975), 633. Cf. DALHUISEN & VAN SETTEN (2003), 103, VAN DEN

HOEK (2003), 436, HAENTJENS (2004-1), 478 and SCHIM (2006), 129 et seq.

136See SCHIM (2002), at 193 and VAN DER BEEK (2003), 245-246. Cf. also supra, s. 7.3.1, on

the transfer of securities not admitted to the Wge system.

137BLOM (1999), 380.

138See DALHUISEN & VAN SETTEN (2003), 123.

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would have been made. In reality, however, a transferor cannot enforce any rights regarding his securities once the debit entry in his securities account has been made, which thus ensures the finality of securities transfers. Especially because that debit entry does not coincide with the credit entry in the transferee’s account, art. 3:84 BW does not seem applicable.139

Similarly, when book-entry securities are transferred conditionally, and the resolutive condition is subsequently fulfilled, the transferor again becomes fully entitled to the assets he has conditionally transferred, even if the retransfer has not (yet) been effectuated.140 But in practice, the initial transferor cannot enforce any rights regarding the securities he is thus entitled to, unless his securities account has been (re)credited.141

Thus, art. 3:84 BW accords badly with transfers of securities by book-entry under the Wge. It is therefore agreed with VAN SETTEN that the transferor’s transfer order and the consequent debit entry in his securities account has to be considered a core element in any securities transfer by book-entry, since in principle, that debit entry results in the cancellation of his rights against his account provider.142 Accordingly, similar rights against the transferee’s account provider are established by the credit entry in the latter’s securities account.143 In sum, a securities transfer under the Wge has to be considered a sui generis type of transfer.

7.4.3 Annulment and finality

As a general principle of property law, a transfer is not granted all proprietary effects if the requirements for the transfer of ownership provided

139See DALHUISEN & VAN SETTEN (2003), 123.

140Art. 3:84(4) BW. See, e.g., ASSER-HARTKAMP 4-I (2004), no. 175. The present author is grateful to Professor W.A.K. Rank for pointing out that in the context of conditional money transfers, (re)transfers after fulfilment of the resolutive condition are also of mere administrative nature; cf. HR 3 December 2004, NJ 2005, 200 (Mendel q.q./ABN Amro Bank NV)(ann. PvS).

141Cf. VAN ARDENNE-STACHIW (1998), 169, who argues that the rules on conditional transfers and the administrative retransfer under art. 3:84(4) BW accord badly with the requirement of credit and debit entries ex arts. 17 and 41 Wge for proprietary effect. She further points out that the general private law provisions on the protection of bona fide transferees against competing claims in the case of conditional transfers are not in accordance with the rules on bona fide transferee protection under the Wge. As a solution, she proposes that intermediaries administrate conditionally transferred securities separately, possibly in a separate pool. But cf. SCHIM (2006), 156-160.

142Cf. DALHUISEN & VAN SETTEN (2003), 124.

143As a strict dogmatic consequence of this analysis, a pledge vested in a Wge share extinguishes when that share is ‘transferred’, and the pledge has to be vested again in the transferee’s share; see SCHIM (2002), 207-209 and VAN DER BEEK (2003), 246.

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by art. 3:84 BW have not been met.144 In addition, when one of these requirements prove not to have been fulfilled, the particular transfer’s proprietary effects are de iure annulled. Provisions of the Faillissementswet (Bankruptcy Act, ‘Fw’) may also result in the annulment of a transfer of ownership, typically by determining retroactively that one of art. 3:84 BW’s requirements has not been satisfied.

If a securities transfer by book-entry would be governed by art. 3:84 BW, a defective title to the agreement between transferor and transferee would result in the annulment of all the transfer’s proprietary effects. Consequently, the credit entry in the transferee’s account, as well as the account balances of all intermediaries involved would be without proprietary effect and those entries would have to be rescinded. Obviously, this would severely impede the smooth functioning of securities settlement, especially in systems of netted clearing and settlement, and the application of art. 3:84 BW is also for that reason unwarranted.145

Moreover, the transferor – transferee relationship should be distinguished from the transferor – account provider and transferee – account provider relationships, and the former relationship should not affect, it is submitted, the two latter ones (abstract transfer regime). Apart from the fact that in today’s anonymised securities markets, the transferor and transferee are often unable to discover each other’s identity, the accountholder – intermediary relationship should not be determined by possible deficiencies in the agreements which the accountholder concludes with third parties. SNIJDERS, one of the draftsmen of the Wge, has therefore argued that the Wge originally intended to establish such an abstract transfer regime, rather than the causal transfer regime of art. 3:84 BW.146

Consequently, the finality of an entry in a securities account depends on the power of disposal in the accountholder – intermediary relationship, rather than the contractual strength of the transferor – transferee relationship.147 In that respect, a securities transfer is similar to the payment of funds, for the finality of entries in money accounts is also not affected by deficiencies in the contractual relation between the debtor and creditor.148 It is reiterated

144See supra, s. 7.4.1.

145Cf. Ch. 4.2.

146SNIJDERS (2005), 95-96 and SCHIM (2006), 143-145. But even if Wge entitlements would be governed by a causal transfer regime, then bona fide transferees are protected against competing claims of third parties through general property law rules, as under arts. 3:88 and 3:238 BW, bona fide transferees and pledgees, respectively, take free of a dispossessed owner’s claim of revendication; arts. 19 and 20 Wge. See HAENTJENS (forthcoming, 2007), comm. at arts. 19 and 20. But see SCHIM (2002), 205 and VAN DER BEEK (2003), 246.

147Cf. SCHIM (2002), 205 and VAN DER BEEK (2003), 246. Accord DALHUISEN & VAN SETTEN

(2003), 125 and VAN ARDENNE-STACHIW in RANK ET AL. (1997), 103.

148 Accord SCHOORDIJK (1975), 634. Cf. SCHIM (2002), 201 and SCHIM (2006), 141 et seq. Contra MIJNSSEN (1975), 207. Cf. SNIJDERS (1972), 173, on finality in money payments.

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therefore that the acquisition of securities by book-entry should not to be considered in light of art. 3:84 BW, but as a sui generis acquisition.149

Finally, the implementation of the EU Settlement Finality Directive (‘SFD’) has ensured the finality of credit entries in securities accounts in intermediary insolvency situations.150 As a general rule of insolvency law, art. 23 Fw determines that insolvency proceedings have retroactive effect to the beginning of the day on which the bankruptcy has been declared, and that all legal acts performed by the bankrupt on that day are therefore reversible; art. 35(1) Fw. But art. 212b(1) Fw currently provides that transfer orders given prior to a bankruptcy declaration may not be revoked, nor may any consequent payment, delivery, netting or any other legal act in the process of settlement be reversed on the grounds of insolvency rules. In addition, transfer orders given after, but still on the same day as the bankruptcy declaration, may not be revoked nor may any consequent payment, delivery, netting or any other legal act in the process of settlement be reversed, provided the CCP, CSD or clearinghouse was unaware of the bankruptcy declaration; art. 212b(2) Fw.151 After the day of the bankruptcy declaration, the insolvency rules apply as always.

7.5 CREATION AND ENFORCEMENT OF SECURITY RIGHTS

7.5.1 Transfer of title

In order to prevent pari passu ranking with a debtor’s general creditors, a creditor may secure his claim by the creation of a pledge or mortgage. These security rights, as well as fiduciary transfers of ownership, can be enforced in the debtor’s insolvency ‘as if no insolvency proceedings had commenced’; art. 57 Fw.152

Current financial markets use book-entry securities as collateral in many arrangements, but prior to the implementation of the EU Financial Collateral Directive (‘FCD’), statutory requirements for the creation and enforcement

149VAN SETTEN (1998), 326, VAN DER BEEK (2003), 246 and also UNIKEN VENEMA (2003), 6-

150See VAN SETTEN in VEREECKEN & NIJENHUIS ET AL. (2003), WOUTERS (1998), 103 and

PETERS (2003), 36. The implementation of the EU Financial Collateral Directive has resulted in the enactment of similar provisions regarding the conclusion of collateral arrangements and its consequent transfers, payment, netting and delivery; see infra, s. 7.5. See also Ch. 9.3.3.

151It is not likely, however, that such unawareness will be convincingly construed, as DNB immediately informs CCPs, CSDs and the clearinghouses of any involuntary liquidation order; art. 212c(2) Fw.

152Euronext Rule Book art. 6 Instruction I.5-1, for example, requires that its participants provide for security interests by a DNB guarantee, by a fiduciary transfer of ownership or by the creation of a pledge under art. 42 Wge.

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of a pledge were felt to be prohibitively burdensome in that particular context. Transfer of title was therefore most often chosen, especially in standardised arrangements such as repurchase agreements, buy/sell-back agreements and securities lending agreements.153 Art. 3:84(3) BW, however, explicitly prohibits the fiduciary transfer of ownership, and it became a matter of debate whether the provision was applicable to the said collateral arrangements, and what the consequences of applicability would be.154

Subsequent legal uncertainty led to the enactment of art. 2a Wet Toezicht Effectenverkeer 1995 (Securities Markets Supervision Act 1995, ‘Wte 1995’), which excluded repurchase agreements from the application of art. 3:84(3) BW. The implementation legislation of the FCD extended this exclusion to all agreements that use book-entry securities as collateral, provided they are concluded by certain, well-defined entities; art. 7:55 BW.155 It is argued here, however, that these derogatory provisions were not needed to avert recharacterisation risks or the application of art. 3:84(3) BW, since, as has been shown above, art. 3:84 BW in its entirety is not applicable to any transfer of securities by book-entry. In addition, it follows from the Keereweer/Sogelease case that art. 3:84(3) BW does not apply to a typical repurchase agreement.156

In that case, the Hoge Raad held that the fiducia ban only applies to agreements whose sole purpose is the creation of a security interest, and that transfers that are intended to provide the transferee/creditor with ‘more than only an entitlement that protects the creditor’s interests’ are allowed. The court’s holding says, in pertinent part, that a transfer of ownership is only prohibited when the transferee’s entitlement to the transferred assets is not restricted as if his entitlement were a pledge or mortgage.157

Under a repurchase agreement, the initial transferee obtains full power of disposal over the collateralised securities, and from his perspective, that power of disposal is one of the major reasons for entering into such an agreement. A repurchase agreement does not restrict the transferee’s/creditor’s entitlement in any way, and must therefore not be considered as being prohibited under the Hoge Raad’s interpretation of art.

153Cf. RAIJMAKERS & VAN BEEK (2003), 183, n.4 and see Ch. 4.3.1.

154See SALOMONS (1994), 1261, for an historical account of the provision.

155Consequently, art. 2a Wte 1995 was removed. See Draft Parliamentary Act TK 2002-2003,

28874, no. 2 and Explanatory Notes to the Draft TK 2002-2003, 28 874, no. 3. See also RAIJMAKERS & VAN BEEK (2003), at 183.

156HR 19 May 1995, NJ 1996, 119 (Keereweer/Sogelease). Cf. HR 18 November 2005, JOR 60, 425 (BTL Lease/Van Summeren). See SCHIM (2002), 209 and VAN DER BEEK (2003), 246. Cf. VAN ERP (2004), 542 and 546, arguing that the FCD resulted in a derogation from the fiducia ban, rather than an interpretation of the same, as the government stated; Explanatory Notes to the Implementation Act TK 2002-2003, 28 874, no. 3, 7-8.

157See RONGEN (1996), 278. Cf. VERHAGEN (1997), 56 and RANK (1998), 403.

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3:84(3) BW.158 Art. 7:55 BW, however, currently explicitly exempts all financial collateral arrangements concluded between certain, primarily financial institutions from the application of the fiducia ban.

7.5.2 Pledge and attachment

As to the requirements for the creation of a pledge (pand) on securities, the Wge distinguishes between the creation of a pledge in favour of the debtor’s account provider and the creation of a pledge in favour of persons other than the debtor’s account provider. In the former instance, a pledge agreement between debtor and his account provider suffices, both to create the security interest and to make that interest effective, i.e. enforceable against third parties; art. 21(1) Wge.159

In the latter instance, the securities pledged must be credited to a special pledge account in the pledgee’s name, held by the pledgee’s intermediary; art. 20(1) Wge.160 Legislative history indicates, however, that such a pledge may also be created by the marking or flagging of the pledged securities in the pledgor’s account.161 The same requirements apply when a pledge is created on an intermediary’s securities held with the CSD; art. 42 Wge. But that provision is problematical, because an intermediary does not have full power of disposal over the pool it administers, and the legislative history of Wge explicitly indicates that no separation between an intermediary’s own assets and the assets it holds for its clients must be made.162 Nonetheless, it has been argued that an intermediary must be able to pledge its own assets held with the CSD, and that therefore a de facto separation of assets must be assumed.163

158Even if the Keereweer/Sogelease case were interpreted in the broadest way possible, i.e. if art. 3:84(3) BW would apply to all transfers of ownership that ‘solely or most predominantly purport to serve the transferee’s security interests’, art. 3:84(3) would not apply to repurchase agreements or like agreements, for full power of disposal and the consequent transferability of the collateralised assets is one of the major reasons for entering into such an agreement. Cf. RONGEN (1996), p. 283 and KLIEBISCH (1997). In the Keereweer/Sogelease case, however, the transfer of ownership concerned was found to be primarily intended to provide a security interest, but the Hoge Raad held that art. 3:84(3) BW was not applicable. The doctrinal majority opinion adhered to above is therefore, it is submitted, the more correct one.

159The Wge provisions on usufruct of securities is identical to the provisions on the creation of a pledge (see art. 23 Wge), except for the fact that no specific rules provide for usufruct for the participant administrating the securities concerned.

160Contra SCHIM (2006), 181, arguing that the pledged securities must be credited to a pledge account in the pledgor’s name.

161Explanatory Notes to the Draft Wge, TK 1975-1976, 13 780, no. 7 (NvW), 2.

162See Explanatory Notes to the Draft Wge TK 1975-1976, 13 780, no. 3, 21-22 and 44. Cf.

HAENTJENS (forthcoming, 2007), comm. at art. 10, 35 and 42.

163 VAN DER BEEK (2003), 246, SCHIM (2004), 420-422, and cf. SCHIM (2006), 176-178 and 182.

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The creation of a pledge on Wge securities is analysed as the creation of a security interest in (a part of) the pledgor’s share in a Wge pool. Should an accountholder’s securities be located in the giro pool (as they usually are), a security interest is thus created in the accountholder’s share in the participant pool held by his account provider. But because of the direct proprietary link between accountholder and his securities, a pledge on that accountholder’s share in the participant pool involves a pledge on the participant pool’s share in the giro pool held by the CSD. This instance of upper-tier attachment, however, does not concern the entire giro pool, nor the entire participant pool’s share in the giro pool, but affects only the securities intended to be pledged. Other accountholders’ interests are therefore not impeded, and art. 44 Wge also explicitly prohibits upper-tier attachment, i.e. attachment of an entire pool at a higher tier.

The enforcement of a pledge on Wge securities closely resembles the enforcement of an attachment. Provided the issuer has not prohibited retrieval, both pledgee and judgement creditor may request the delivery of the pledged securities in order to sell them in the way prescribed by general private law, viz. by public auction; arts. 22(1)(a) and 24(1)(a) Wge, and art. 3:250(2) BW. In addition, pledged or attached securities need not be delivered out of the Wge system, but may also be sold directly, i.e. by bookentry, at a public auction by the pledgee/judgement creditor in the same way; arts. 22(1)(b) and 24(1)(b) Wge.164

The implementation legislation of the EU Financial Collateral Directive, however, explicitly exempts collateral arrangements concluded between certain, well-defined institutions from these rules. In the context of such arrangements, a pledgor need not sell the pledged securities by public auction, nor notify the pledgor; arts. 7:54(2) and 7:54(5) BW. A pledgor is currently allowed to sell the pledged securities privately or to appropriate them upon the debtor’s default, which clearly contrasts with the longstanding principle that any appropriation of pledged assets was prohibited; 3:235 BW.165 Moreover, in the context of the said arrangements, a pledgor is allowed to use, i.e. sell or hypothecate, the pledged securities to third parties, prior to the pledgor’s account, which also implies an appropriation by the pledgee; 7:53(1) BW.166

164See Explanatory Notes to the Draft Wge TK 1999-2000, 27 164, no. 3, 9. Cf. RANK- BERENSCHOT (1998), 162-164 and HAENTJENS (forthcoming, 2007), comm. at art. 22.

165That article is the Dutch codification of CODE JUST. 8.34.3 (Constantine 326). Contrast with the current art. 7:54 BW. For a private sale, however, a court order is still required; art. 7:54(5) BW.

166See KEIJSER (2003), 432, RAIJMAKERS & VAN BEEK (2003), 187, STEFFENS (2005), 63, VAN VLIET (2005), and KEIJSER (2006), esp. 175 et seq. and 297 et seq. The last author extensively argues against these derogations from general private law principles, especially in the context of agreements between parties that do not have equal bargaining power.

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7.6 CONFLICT OF LAWS

7.6.1 Introduction

Unlike most other areas of Dutch law, the greater part of conflict of laws rules concerning securities has not been codified in statutory provisions. As practically no case law is available either, considerable legal uncertainty exists as to these matters. The conflict of laws provisions of the EU Settlement Finality Directive (‘SFD’) and the Financial Collateral Directive (‘FCD’), have been implemented into the insolvency and private law code respectively, but the scope of these provisions is limited.167 The enactment process for an Act on Conflict of Law Rules Relating to Property Law Issues (hereinafter: ‘Draft Act’), on the other hand, has recently accelerated.168

As noted above, the Hoge Raad held in the Kas-Associatie/Drying Corp. case that an accountholder’s entitlement as a co-owner in a Wge pool classifies as a recht op naam (claim).169 Under general Dutch private international law, this would imply the applicability of lex contractus (proper law of the contract) to determine all proprietary issues regarding the ‘claim’. As a consequence, all proprietary issues would be determined by the proper law of the contract that created the claim – provided no choice of law has been made.170 Such a rule would be in accordance with the Bechem Chemie/Hansa Chemie case, in which the Hoge Raad held that under article 12(1) of the Rome Convention 1980, the law designated by the parties to an assignment of a debt also covers its proprietary aspects.171

However, a number of arguments could be formulated against the position that that rule applies to accountholder interests. First, it is unlikely that a transfer of securities by book-entry in a securities account classifies as

167The provision of the SFD referred to has been implemented as Article 212(f) Fw, of the FCD as art. 7:56 BW. See Explanatory Notes to the [second, MH] Draft Implementation Act TK 2004-2005, 30 138, no. 3, 1 and TK 2004-2005, 30 138, no. 2, 4. Cf. RANK & VAN DER LELY (2002), 398.

168See TK 2006-2007, 30 876, nos. 1 through 3, issued on 20 November 2006. The text of this Draft Act is practically identical to the Preliminary Draft that was issued as long ago as November 1998. The Draft Act is part of a larger project to codify all current rules of Dutch private international law, and will be referred to frequently in the following sections as reflecting the current, albeit customary, law. The entire Preliminary Draft for Consolidated Private International Law, as well as the Report of the State Committee for Private International Law on the Preliminary Draft Act, are available at the website of the Ministry of Justice: www.minjus.nl.

169Cf. supra, s. 7.3.5.

170Cf. Draft Act Article 10 and the Rome Convention Article 12.

171HR 16 May 1997, NJ 1998, 585 (Bechem Chemie/Hansa Chemie).

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