Sooner or later in life we find ourselves in his hands a note receivable. Exchange and checks are certainly the most common. But what are the characteristics that we must make the case? What can we expect?
Clearly everything step by step, defining the three basic characteristics of debt securities or literalism , abstraction and autonomy. Essential character – to which we have already mentioned – is the literalness. According to this feature, the right to claim exists only in a form and manner specified in the letter, that the document (or printed form if you prefer). The proposal states that the amount written on the letter is the only claim and any other service not provided (such as the inclusion of an interest rate ) is not legitimate.
Another important feature is the abstraction. The report is generally abstract the securities, which does not mention specifically the cause for which it was issued. So reading the document there is no point where it is written justification trigger that pushed the person to enter into security. Clearly, this feature does not apply to all debt securities, are in fact exceptions are corporate securities (stocks and bonds) which is nominally compulsory. Finally, we talk about autonomy, namely the feature thanks to which the certificate of credit can flow freely between different owners without the last of these should in no way depend on the relationship between the previous holders of the title.
Classification of securities:
Once the division title between causal and abstract titles, shall be required for further differentiation. Here is a brief schematic:
Registered securities: Are those payable to a single subject. The transfers are constrained by a record in the relevant registers. The name is then placed in two locations on the debt securities and the log that is in possession of the issuer.
Instruments to order: This is a frequent event. The header is marked only on the security. It can therefore be easily transferred to others through “endorsement” a procedure requiring the signatures on the back of the title and that directed the title to a new owner.
Bearer: It is a credit to which we must pay particular attention, considering the fact that the loss of whoever finds it is entitled to collect. The law of credit transfers, in fact, “bearer” is the one who provided the paper.
In addition, there may be cases in which the type of credit depends on the nature of the issuer, namely whether it is an exchange between people ( private equity ) or an exchange between companies or institutions ( government bonds ). There are also cases of evidence of mass, but concluded in a single step characterized by an equal content for more people, or individual, if it concerns a single subject.
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