Security transfer of title in the form of a sale and repurchase agreement (repo)
DOI:
https://doi.org/10.21638/spbu25.2022.204Abstract
In the article the sale and repurchase agreement (repo) and the purpose of its conclusion are examined. Among others, the credit and collateral purpose of the contract is highlighted. It is recommended to distinguish the repo with the purpose of title financing from the agreement concluded with another purpose. In this regard, the signs that indicate the credit and collateral purpose of the contract are proposed. Then the structure of obligations in repo transaction is described as well as requirements to its subjects and object. The article contains the analysis of arbitrazh (commercial) courts practice on disputes related to repo. Some of the problems faced by courts are discussed, including the recharacterization of repo as a pledge over securities. Certain issues related to repo are examined using the example of the case considered by the Supreme Court of the Russian Federation. While evaluating the court decisions of the case the norms to be applied to the contract are defined. The specific rules on repo are compared with the norms on loan and pledge. As a result of the comparison, it is concluded that the norms on repo in their interpretation in accordance with the credit and collateral purpose of the contract achieve a balanced regulation of the relations and at the same time have regard to the particularity of the securities market. It is also concluded that the norms on loan and pledge should not be applied to repo. At the end of the article, it is recommended that in the repo dispute the legal approaches to the other title-finance devices should be applied. In this respect some examples when the legal approaches to finance lease have been applied to repo in the practise of the Supreme Court of the Russian Federation are noted.
Keywords:
sale and repurchase agreement, repo, title security, security transfer of title, pledge, recharacterization
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Articles of "Pravovedenie" are open access distributed under the terms of the License Agreement with Saint Petersburg State University, which permits to the authors unrestricted distribution and self-archiving free of charge.
