Lloyd's Maritime and Commercial Law Quarterly

Professor Francis D Rose

Document

SHARE LENDING IN AUSTRALIA

Beconwood v. ANZ

A. Securities lending and borrowing

The monetization of choses in action has led in part to financial documentation to effect their alienation which, though often standardized, has confused laypersons and even lawyers alike in the attempt to utilize terminology more closely associated with money.1 It is perhaps understandable in such situations that judges look at the agreement in the context of the market it operates when interpreting the agreement, even if the starting point is the documentation itself.

In Australia, the true effect of a securities lending and borrowing agreement (based largely on the Australian Masters Securities Lending Agreement (“AMSLA”), itself derived from the Overseas Securities Lending Agreement prepared by the International

1. See further D Fox, Property Rights in Money (2008), ch 1, arguing that modern money should not be seen as corporeal property. However, incorporeal property such as shares, while informing our understanding of the nature of money, has in turn been affected by our treatment of money, particularly as debt claims. Consequently, while shares were sufficiently reified to be the subject of strong proprietary rights for a short period, the trend more recently has been to dephysicalize them both in fact and in law. A Pretto-Sakmann, Boundaries of Personal Property: Shares and Sub-Shares (2005), ch 11 thus argues that shares should be considered property only as wealth and not in contra-distinction to obligation.

CASE AND COMMENT

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