Equity clearing and settlement models in the UK and Taiwan: Market stability and investor protection perspectives

Research output: Chapter in Book/Report/Conference proceedingChapterpeer-review

Abstract

This chapter uses comparative law analysis to examine the systems and processes of post-trading infrastructure – clearing and settlement – in the UK and Taiwan. Its purpose is to identify the differences in the operating models, the governance and the regulatory thinking behind them. Taiwan clearly shows its cautious approach to post-trading infrastructure which is evidenced in its vertical silo system and in its direct and transparency holding system. However, Taiwan does not provide clear legal rules dealing with insolvency risk and settlement finality. It is also not clear why Taiwan does not follow the ‘place of the relevant intermediary approach’ (hereinafter ‘PRIMA’). It is argued that Taiwan can learn from the UK’s non-vertical silo model to increase innovation. Taiwan could also adopt the trust and non-transparency indirect holding system to increase investor protection and settlement finality to increase legal certainty.
Original languageEnglish
Title of host publicationLegal Thoughts between the East and the West in the Multilevel Legal Order
Subtitle of host publication A Liber Amicorum in Honour of Professor Herbert Han-Pao Ma
EditorsChang-fa Lo , Nigel N.T. Li, Tsai-yu Lin
Place of PublicationSingapore
PublisherSpringer Nature
Chapter25
Pages423-444
Number of pages21
ISBN (Electronic)9789811019951
ISBN (Print)9789811019944
DOIs
Publication statusPublished - 12 Nov 2016

Publication series

NameEconomics, Law and Institutions in Asia Pacific
PublisherSpringer

Keywords

  • equity
  • share trade
  • clearing
  • settlement
  • central counter party
  • central securities depository
  • stock exchanges
  • investor protection
  • market stability

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