Since time immemorial, mankind has been striving to develop tools securing property rights. This function has long been performed by securities; they trace their history back to the 12th century. Over the years of its existence, monetary documents have undergone a significant evolution, although their main essence remains unchanged. We will tell you about the specifics of registered securities, why they are issued and how they function.
The concept of "security"
The first money documents appeared a very long time ago. Historians believe that at first securities - bills - appeared in Italy (in the 12th century), and then quickly spread throughout the civilized world. This concept is defined as a monetary document certifying property rights, and their implementation or transfer is possible only upon presentation of paper. In order to realize its functions, the security must be duly executed: form, details, registration. These documents are both credit and payment instruments. The legal status of securities is movable property. The diverse practice of their use is associated with the numerous functions and properties of these documents.
Securities Properties
Not every money document can be called a security. These documents are distinguished by the presence of the following properties:
- Circulation. Bearer or registered security may be sold and bought, as well as act as a means of payment.
- Availability. Documents have the ability to be part of civil transactions.
- Standard design. The paper must pass all types of necessary registrations and have the established form with the prescribed details.
- Documentary. The paper must go through all the necessary formalities and receive the status of an official document.
- The market. A security is a market instrument; it directly reflects it.
- Profitability. Money documents should be profitable - this is their most important property.
- Regulability and state recognition. The authorities guarantee the legitimacy of the issue and circulation of securities, they are involved in the regulation of this market.
- Risk. Like any market instrument, securities are at risk of loss of profitability and loss of property rights by the owner.
Types of Securities
There are several varieties of monetary documents. The most popular of them are stocks, bonds, checks, bills. There are many classifications of securities for various reasons. In terms of life they are divided into urgent (with different time periods) and unlimited. By the method of fixing the owner - bearer, in which the specific owner is not indicated, registered (to register ownership they must be entered in the register of registered securities) and order, which combine the properties and functions of the first two types. In the form of existence, documentary and non-documentary papers are distinguished. Also distinguished are registered and unregistered, Russian and foreign, market and non-market, risky and risk-free, profitable and non-profitable and other types of monetary documents.
Securities Functions
Any document, including money, is issued for specific purposes. Securities are designed to perform a number of functions:
- Regulatory. Documents contribute to the redistribution of investments in various sectors of the economy, regions and industries.
- Informational. Papers are an indicator of the state of the economy as a whole.
- Legal. This document primarily provides ownership rights, and also gives the right to information, management, etc.
- Revenue generation.Another primary task of securities is to bring profit to the owners.
- Investment. Documents allow you to attract additional capital in specific areas of the economy.
- Estimated. Securities are a means of lending and payments.
Features of registered securities
The main difference between this type of documents is the right to own and use them fixed for a particular person. To carry out this operation, a register of registered securities is maintained, where the owner’s data and the numbers of securities purchased by him are recorded in paper or electronic form. The main properties of these securities come from here: it is always known to whom they belong, all transactions with them are necessarily recorded, income from such investments is subject to tax deductions. These documents are better suited to regulation and control than bearer documents. With the introduction of a non-documentary form of existence, most securities become registered. Since the electronic form of the document without fail saves data about the owner.
Reasons for Release
Since the registered security lends itself to greater control, the market is interested in increasing their output. Today, one can see a tendency to increase the issue of this type of documents, which is explained by the high development of financial markets, the need to strengthen control over the circulation of securities and state interest in taxation of capital. At the same time, the form of issuing securities basically does not matter.
Owner Rights
Any monetary documents are created in order to secure ownership. So the rights certified by registered security are primarily related to property. The owner may sell or give his securities, he may cede the right to conduct transactions with them to another person. But if it is simple enough to transfer the presentation papers to an authorized person, then in the case of registered ones, registration formalities must be followed, otherwise the transactions will be invalidated.
Varieties
There are several types of personal monetary documents. They are usually divided into basic and derivatives, or derivatives. The first includes bills, checks, bonds, stocks, bank certificates, certificates (deposit, trust and savings), mortgages, receipts. The second group includes options, futures contracts and swaps.
Features of the appeal
Registered paper has its own specifics when handling. Each document must be entered into the register of owners of registered securities, and if the owner wants to entrust the right of the transaction to another person or wishes to cede them to someone, he will have to perform a number of formal operations. The procedure for assignment of claims for registered paper is carried out through an order proceeding from its owner. Or, a bilateral transaction may be concluded, the so-called assignment, confirmed by special documents (titles). Any movement of securities is reflected in the register of owners, and this allows you to track their fate and control the circulation.
Registry
When issuing registered securities, they must be registered in a special list. But this is not just a magazine where the names of customers fit in. Keeping a register of holders of registered securities is usually the issuer's task. The registry holder, in accordance with the laws of the Russian Federation, must have a registrar endowed with a special state license. The list can be kept in paper or electronic form, today there are many computer programs for the implementation of this task. The register records information about the owner, about burdens of securities, about types of shares, and about nominal holders. In addition to maintaining a registration journal, the holders of these lists maintain personal accounts of securities owners, record transactions with assets, and store various supporting information.The activities of the holders of such registers are regulated and controlled by the Bank of the Russian Federation.