Depository Bills
9.62 Participants in international trade transactions may consider the establishment of a clearing
house to which holders of instruments, namely bills (including those in the form of substitute bills and EPOs), may negotiate respective instruments that they hold for deposit.
Subsequent transfers of a deposited instrument will be effected by making appropriate entries in the records of the clearing house. For a deposited instrument, the clearing house will be deemed to attorn for the participant to whose account the instrument is credited at the time. Effectively, under this practice, instruments deposited with the clearing house will be immobilised so that a participant in whose favour a transaction is effected will be deemed to be in possession of the depository bill. Instructions under which the clearing house will be authorised and bound to act by making appropriate entries in its records must originate exclusively from that participant or from a party acting under that participant's authority. Consequently, a transfer recorded by the clearing house will have the effect of a constructive delivery from the transferor to the transferee. Discharging payments will bemade to the clearing house which will be obligated to pay the ‘holder, namely, the participant to whose account the instrument is credited at the time. Dishonour by the drawee will require a secondary party to make payment to the clearing house, which in turn will pay the holder.
9.63
Such a scheme will be modelled on the Canadian Depository Bills and Notes Act,[947] dealing with depository debt securities. However, the Canadian scheme is limited to instruments that, prior to their deposit, are written bills and notes, while the proposed scheme for bills used in international trade is designed to also cover substitute bills and EPOs deposited with a clearing house. As well, the proposed scheme will have to address a transfer from the clearing house to a holder who may not be a participant.
VIII.
More on the topic Depository Bills:
- US Treasury bills, notes and bonds
- Treasury bills
- Bills of exchange and banker's acceptances are instruments that are particularly useful in helping to oil the wheels of international commerce.
- US Treasury bills
- Depositum (Deposit)
- Certificates of deposit (CDs)
- UK Treasury bills
- Hare C., Neo D. (eds.). Trade Finance: Technology, Innovation and Documentary Credit. Oxford University Press,2021. — 417 p., 2021
- The Substitute Paper Bill
- Background: The Presentation of Paper Documents under Documentary Letters of Credit with Special Focus on Bills of Lading and Insurance Certificates