A staggered system that is a bureaucratic nightmare

The fact that securities are staggered in the way that they are liquidated means that those who manage them will face a number of challenges. Central government has traditionally expressed an interest in regulating the payments that accrue from securities. The first area of concern is security in general with specific reference to anti money laundering arrangements.

The second issue is the desire on the part of the government to tax some of these revenues. There are specific challenges that will affect the investor, the investment manager and the overseeing authority. Government almost always sets up a regulatory body whose main focus will be to ensure that these revenues do not escape the tax regime. This article aims to highlight some of the important themes for all the stakeholders.

Money buys the securities

You have to use a certain currency to buy the relevant securities. This might appear to be an innocuous detail that is not worthy of great attention but the type of currency you use to buy your securities can have a devastating effect on the final value of that security.

In fact you will have to come to an agreement as to the currency that is to be used throughout the lifetime of the security and it might prove to be a difficult task to change it. Those people who operate within the securities sectors will know the currencies that work and those that are a dud. If you happen to live in a country that has a dud currency then you are in all sorts of trouble.