Negotiable Instruments, Investment Securities and Financial Instruments in Polish Law.

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Negotiable Instruments, Investment Securities and
Financial Instruments in Polish Law.

• Dr Marcin Spyra

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Financial instruments and securities
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Negotiable instrument

• Negotiable instrument is a right or a claim
  represented by a certificate i.e. this right or
  claim cannot be executed without presentation of
  the document which represents the right or claim.

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Bona fide performance.

• A is a debtor of B. B has a twin brother C. A
  performs to C without knowing that he performs to
  an unauthorised person. A performs in the flat of
  B. It is dark and C declares he is a real
  creditor.
• Is A released from his debt?

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Performance to an unauthorised person.

• Article 452 CC
• If the performance was made to a person not
  entitled to accept it and the acceptance of the
  performance was not confirmed by the creditor,
  the debtor shall be released to the extent in
  which the actual creditor profited from the
  performance.

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Assignment of pecuniary claim

• A sold commodities to B. The price was 50,000
  PLN. B was to pay on 15.05.2013. A assigned to C
  a pecuniary claim against B.
• C claims a payment.
• B claims the commodities were not conform with
  the contract.
• Does it affect the claims of C?

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Undisclosed objection

• A endosed a promissory note. B was an endorsee.
  A and B agreed that A is not liable for the
  solvency of the principal debtor. They did not
  enclosed the relevant clause in the endorsement.
  The next endorsee was C, who was unaware of the
  undisclosed agreement between A and B. The last
  endorsee was D, who knew of the undisclosed
  objection.
• Is A liable to D?

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Bona fide performance.

• T stole a bill of lading which was a security
  upon an order. E was the last endorsee. T using a
  forged passport of E demended the release of
  goods from the carrier (C). C, who did not know
  personally the endorsee, performed to T.
• Is C released from liability?

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Uncertificated Securities

• Uncertificated (dematerialised) security is a
  security represented not by a certificate but by
  a book entry.
• Book entries are executed by central depository
  institution and their participants (investment
  firms, banks etc.)

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Interest rate swap.

Fixed interest rate
Debtor
WIBOR 6M 3
WIBOR 6M 3
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Equity swap

Market price for 100,000 shares of X plc on
expiration date
Investor
5.000.000 PLN on expiration date
Investment 100,000 shares of X plc the target
is 50 PLN forshare
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Stock Put Option
The obligation of the issuer to buy 50,000 shares
of X plc for the strike price 10 PLN

Issuer
Buyer
Premium 50,000 PLN
50,000 shares of X plc bought at the spot price
10 PLN
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Financial market.