In addition, the Guide is intended to cover a broad range of transactions that serve security functions, including those related to possessory and non possessory security rights, as well as transactions not denominated as secured transactions (such as retention of title, transfer of title for security purposes, assignment of receivables for security purposes, financial leases, and sale and leaseback transactions and the like).

(c) Foreign exchange transactions, inter bank payment systems, transfer of security rights and transfer of economic assets

The deposit given by the customer, all the securities that have been purchased through securities lending and borrowing, and all the funds from the sales of securities are collaterals to the securities firm, and shall be deposit to the customer securities guarantee account or the customer funds guarantee account and credited to the customer s credit granting account.

These examples represent only a few of the numerous forms of secured credit transactions currently in use, and an effective secured transactions regime must be sufficiently flexible to accommodate many existing methods of financing, as well as methods that may evolve in the future.

The law should treat all devices that perform security functions as secured transactions, including the transfer of title to tangibles or the assignment of intangibles for security purposes, retention of title, financial leases and hire purchase agreements, except to the extent otherwise contemplated in recommendation 7 .

(2) such insurance fund operation as guarantee, financing and investment, etc.

The types of securities that can be lent to the customer by the securities firm and can be bought with the funds lent to the customer by the securities firm, the types and coefficient of the securities that can be used as deposit, the time limit for securities lending and borrowing, the minimum guarantee maintenance ratio and the time limit for making up the difference shall be determined by the stock exchange.

(4) As regards tradable financial assets, it is required to separately list the beginning of period and end of period fair value of tradable bond investment, tradable equity instrument investment, financial assets which are specified to be measured on fair value and whose fluctuations are included in the current profits and losses, derivative financial assets and other tradable financial assets.

The law should specify that a security right is created by agreement between the buyer, grantor or financial lessee (hereinafter referred to as the grantor ) and the seller, secured creditor or financial lessor (hereinafter referred to as the acquisition financier ) which is in writing and evidences the intent of the grantor to grant a security right or is accompanied by delivery of possession pursuant to the agreement and in accordance with recommendation 9.

However, because secured transactions often involve parties and assets located in different jurisdictions, the Guide also seeks to address the recognition of security rights and title based security devices, such as retention of title and financial leases, effectively created in other jurisdictions.

Equivalence of acquisition financing devices to security rights

Article 48 Securities lending and borrowing referred to in this article means that in the securities trading at the stock exchange or other securities trading places that have been approved by the State Council, securities firms lend capital or securities to customers for them to buy or sell securities based on the corresponding collaterals provided by the customers.

These transactions are essentially non possessory security rights, and they are primarily used in States where the secured transactions law has not yet appropriately recognized non possessory security rights.

(i) any commercial contract or transaction for the sale of goods or supply of services

Security for post commencement finance (paras. 103 and 104)

3. Also commends the Commission for the approval of the substance of the recommendations of the draft legislative guide on secured transactions, which has been designed to facilitate secured financing, thus promoting increased access to low cost credit and enhancing national and international trade

(d) The transfer of security rights in sale, loan, holding of or agreement to repurchase securities or other financial assets or instruments held with an intermediary

The concern was expressed that allowing access to data about financing transactions to the public might prejudice the rights of assignors.

Recommendations of the draft legislative guide on secured transactions

(b) (i) Transactions on a regulated exchange (ii) foreign exchange transactions (iii) inter bank payment systems, inter bank payment agreements or clearance and settlement systems relating to securities or other financial assets or instruments (iv) the transfer of security rights in sale, loan or holding of or agreement to repurchase securities or other financial assets or instruments held with an intermediary.

The risks to which the lenders are exposed in project finance are considerably higher than in traditionally secured transactions, even more so in the case of infrastructure projects where the security value of the physical assets involved (e.g. a road, bridge or tunnel) would rarely cover the total financial cost of the project, given the lack of a market where such assets could be easily realized.

(c ) Colloquium on Reform of Secured transactions Law the draft UNCITRAL Legislative Guide on Secured Transactions (Clermont Ferrand, France 23 April 2004)

Note by the Secretariat

Attracting post commencement finance providing priority or security

Acquisition security rights include those that are denominated as security rights, as well as those that are denominated as retention of title, arrangements and financial leases.

Financial transactions

(11) Where a securities firm does not deposit or manage trading settlement funds, trust funds and funds and securities in secured accounts of clients according to provisions

The law should treat acquisition rights arising under transactions, such as sales with retention of title arrangements, purchase money lending arrangements and financial leases, as security rights by including such rights within the definition of security rights and, thus, applying the rules governing security rights to these rights directly ( unitary approach ).

Article 9The financial assets or liabilities meeting any of the following requirements shall be classified as transactional financial assets or financial liabilities

(k) Harmonize secured transactions laws, including conflict of laws rules.

quot (4) Receivables financing means any transaction in which value, credit or related services are provided for value in the form of receivables. Receivables financing includes, but is not limited to, factoring, forfaiting, securitization, project financing and refinancing.

Question on the requirement to report suspicious transactions by all financial institutions, as well as by insurance companies and other such intermediaries engaged in financial transactions.

Article 53As for the financial assets initially obtained or produced at source and the financial liabilities assumed, the fair value thereof shall be determined on the basis of the transaction price of the market.

The legislation contains strict secrecy provisions in order to protect legitimate financial transactions and defines the authorities that are entitled to have access to information, and how they may use and store it.

Key objectives of an effective and efficient secured transactions regime

Due to the absence or limited role of personal guarantees or securities provided by the project sponsors, project finance is said to be non recourse or limited recourse financing.

(a) Alert third parties dealing with the movable assets of the grantor of the risk that those assets may be encumbered by a security right and

If the customer fails to make up the difference within the prescribed period, or fails to pay back the due debts of the securities lending and borrowing, the securities firm shall immediately dispose of its collaterals according to the agreement.

The availability of such security was considered crucial for the availability of financing for privately financed infrastructure projects.

(ii) The seller or financial lessor of the same encumbered asset that has retained title to it pursuant to an acquisition security right

K. Harmonize secured transactions laws, including conflict of laws rules

Yet another concern was that the volume of transactions involving financing on the basis of tort receivables may be so small that it may not be worth covering.

In the absence of efficient sources of financing, the transaction costs of South South trade, technology and investment flows will be increased.

2. Commends the Commission for its work on the preparation of a legislative guide on secured transactions, which has been designed to facilitate secured financing, thus promoting increased access to low cost credit and enhancing national and international trade, and notes with satisfaction that the Commission expects to complete that work in the nearest future

The purpose of the provisions of the law on acquisition financing devices (sales with a retention of title arrangement, purchase money security devices and financial leases) is to