The Jurisprudential Basis for Bond Registration and Depository

The laws and regulations concerning bond registration and depository constitute the legal foundation on which the bond market operates. For bond registration and depository, a clear understanding of its jurisprudential basis proves to be a prerequisite for establishing a complete set of laws & regulations and a sound business framework. With respect to bond registration, this paper holds that bond rights, as a type of composite rights, encompass the rights to hold bonds and the right-obligation relationship represented by bonds. In conjunction with the laws & regulations prevailing in China and the international experience in this regard, this paper therefore puts forth three recommendations. First, the definition of securities in securities law will be expanded to cover all types of bonds. Second, basic rules for bond registration and rights confirmation will be made clear in securities law and other laws. Third, it will be explicitly stipulated in related laws that there is only one bond registration institution. As to bond depository, this paper argues that in China, the central securities depository (CSD) has a principal-agent relationship, not a fiduciary relationship, with issuers and investors