Browsing by Author "Meissner, Ilke Ingrid"

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    Securities within the realm of private law : a theoretical and practical analysis of the legal nature of shares
    (Stellenbosch : Stellenbosch University, 2019-04) Meissner, Ilke Ingrid; Lubbe, G. F.; Stellenbosch University. Faculty of Law. Dept. of Private Law.
    ENGLISH ABSTRACT : This thesis provides practical and theoretical perspectives on the legal nature of shares. In South Africa and beyond, shares have undergone significant transformation over the last decades. They are held and transferred through a complex net of intermediaries. While commercial practice and financial markets have devised efficient and pragmatic holding and transfer mechanisms, the changes brought about by computerisation and a pervasive model of systemic intermediation have unsettled the existing consensus on the legal, conceptual underpinning of shares. The thesis therefore aims to provide clarity on the legal nature of holding mechanisms, the legal nature of transfer mechanisms and the legal nature of shares viewed more abstractly within the context of the taxonomy of private law. The thesis approaches the first two questions historically and comparatively to show how the legal understanding of holding and transfer mechanisms has changed. While the nature of intermediation has changed dramatically, the thesis shows that the legal concepts and mechanisms underlying the holding of shares predominantly have proved to be sufficiently adaptable. This cannot be said to be the case when considering the legal nature of transfer mechanisms. Traditional transfer mechanisms, such as assignment, negotiation and delivery have largely been replaced by mechanical, account-based transfer ones. On this basis, the thesis suggests that the continued application of the principles of cession to a South African analysis of transfer should be scrutinised in a more fundamental fashion. To complement the discussion, it is shown that conceptual alternatives to traditional doctrinal thinking can be found in a functional approach to legal reasoning and in a procedural “law of accounts” that synthesises the common characteristics shared by many rights held on accounts. Moreover, two theoretical models are considered that shed light on the question whether systemic intermediation leads to the creation of new and multiple assets which derive from a share and are held by lower-tier intermediaries and ultimate investors in place of the share itself. This approach, made popular by the introduction of “securities entitlements” by Article 8 of the UCC and also reflected in the notion of beneficial interests of a trust in English law, can be explained as establishing rights against the rights of a higher-tier intermediary. These rights function as assets. On the basis of the burdening of rights model, borrowed from German law, the application of the rights-against-rights approach to South African law is rejected, however. The thesis concludes that South African law evidences neither a multiplication of assets nor a division of ownership in relation to intermediaries. Lastly, the thesis considers the assertion that shares are, or should be, property or “property-like” to provide adequate protection to investors. An enquiry into the legal nature of shares is the overarching theme of the thesis that draws together its different parts. The thesis proposes an explanatory model that can be used to determine whether and under which circumstances obligations can have absolute effect in relation to third parties. It asserts that shares are obligations, but that a proper evaluation of the internal sphere (the issuer-investor bond) shows that shares are simultaneously object-like. The explanatory model suggests that obligations of this kind can serve as objects of other obligations (the external sphere) which may consequently have real or limited-real effect in relation to third-parties. The model therefore narrates the interrelation between property and obligations without calling into question the well-established fact that shares are personal rights, albeit with limited real effect.