Necessity of the Law on Financial Transactions

Description

The purpose of the papers is to argue for a new law on financial transactions, using repo transactions as an example.. For the achieving of the results various standard scientific methods are used, among them are the study of the applicability of the fundamental concepts of civil law to the characterisation and legal description of repo transaction, analysis of (a) Latvian practice and domestic repo contracts, (b) problematics and possible place of the repo transaction in the system of the Latvian law.  . Repo could be characterised as sinallagmatic consensual financial transaction of the real nature, constructed as two mutual sales under umbrella of one transaction, in which loan either in cash or securities is exchanged against title transfer collateral. Repo  is quite similar to the repurchase transaction stipulated in the the articles 2054-2059 of the Latvian Civil Law. However, (i) while repurchase transaction is being consensual, the repo should be recognised as  real transaction (due its collateral nature), (ii) the effect (status of ownership rights) in repurchase is unknown till the certain moment in future (date when rights to repurchase are utilised or expire), while the effect of repo is predictable - ownership in result of the transaction must remain with the initial seller.. All aforementioned, as well other significant aspects allow to conclude that repo is an autonomous type of transaction which is not specified in the Latvian law, as well as various other financial transactions such as contracts for differences, futures, swaps and other. The complex structure of transaction, lack of the knowledges among practicing lawyers and significant deviancies in understanding of the legal nature leads to the uncertainity of the outcomes in such transactions. But at the same time future economical developments requires certainity  and new Law on Financial Transactions should help to improve situation in general.

Period	29 Mar 2023
Event title	RSU Research week 2023: PLACES
Event type	Conference
Conference number	3
Organiser	Rīga Stradiņš University
Location	Rīga, LatviaShow on map
Degree of Recognition	International