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providers, who have benefited from the fact that the 2001 reform continued to provide for decentralised issuer registers.

3.5 Summary of the analysis

The analysis contained in this chapter showed that, until 1996, all English securities were transferred by means of paper documents. When the handling of paper certificates became too cumbersome, securities were dematerialised. English securities certificates constitute documents of evidence only: they do not, for example, like German or Austrian securities certificates, incorporate the entitlement to which the securities relate. This may have been one of the reasons why England found it easy to opt for dematerialisation. It will be shown in part II that, in contrast, Germany and Austria opted for immobilisation when their legal systems had reached a point when paper certificates became to cumbersome to handle.

The process whereby uncertificated securities were introduced in England was beset with difficulties. The first attempt to introduce an uncertificated transfer system (Talisman) had to be abandoned; it collapsed under the influence of diverging lobby groups. Market infrastructure providers succeeded in delaying reform and the Bank of England had to intervene to introduce the current CREST settlement system.

There would have been numerous ways in which a transfer system that looked after all interest groups concerned could have been devised. The individuals carrying out the law reform supporting the change to paperless transfers did not even attempt to explore alternative options available to them; dematerialisation was effected simply by modifying the legal doctrinal rules already in place.

The transfer process within CREST replicates the paper-based transfer process. When it was first introduced, CREST was only a service centre through which electronic instructions rather than paper documents were matched and forwarded to the issuer. The records maintained by CREST in relation to uncertificated securities have, in the meantime, been upgraded to constitute prima facie evidence of title to the securities, but the architecture of the system and the property law governing transfers has remained firmly rooted within English property law doctrine. There continues to be a distinction between legal and equitable title to the securities: ownership is not defined in absolute terms as it would be in a civil law system, but continues to exist as a relative entitlement.

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Nevertheless, convergence can be observed. The reforms carried out in 2001 are examples of an attempt of the English securities market to adopt rules that are internationally competitive. This has, however, been achieved by bringing English law functionally into line with what seems to have emerged as an international standard of best practice. The form in which the change was implemented was determined by the legal doctrinal rules that already prevailed in England and that can be traced back to the time when securities first emerged on the English market.