Chains of Intermediaries in Shareholding in Listed Companies

By Louise Van Marcke, Lawyer, DLA Piper

Legal and Market Insight into Securities Settlement, Custody Chains and Shareholder Rights

Behind every shareholding in a listed company, and indeed behind the holding of most securities (financial instruments), lies an invisible but critical infrastructure: the chain of intermediaries that connects investors to issuers. These chains – made up of brokers, banks, (global) custodians and (I)CSDs – underpin modern capital markets, facilitating the settlement and safekeeping of securities on an international scale. But while they bring efficiency, they also create legal complexity, especially when it comes to determining the entitlements of different accountholders in the chain.

Through a comparative legal lens, the book maps how securities laws and market practices across key jurisdictions – including the EU, the UK, the US, Belgium, France and Germany – legally treat the trading and holding of financial instruments through custody chains. While the book focuses primarily on listed shares, many of its insights extend to the holding and intermediation of other securities (financial instruments) more generally, offering broader relevance for investors navigating complex custody chains. The book examines how the legal status and rights of end-investors, and the responsibilities of custodians and (I)CSDs vary significantly across systems, often with consequences

that only become apparent in moments of stress or dispute. It unveils how differences in company law, securities regulation, and civil law understandings of ownership rights may shape outcomes for end-investors in such disputes. Against this backdrop, the book also analyses potential legal and technological reforms, such as the introduction of Distributed Ledger Technology (DLT) in post-trade infrastructures and the broader shift toward more transparent and direct holding models. 

Our Financial Services & Insurance team has a deep understanding of the custody landscape and the legal frictions that arise in intermediated securities holdings and CSD-relationships. We regularly assist financial institutions, custodians, CSDs and technology providers supporting or partnering with Financial Market Infrastructures (FMIs) in navigating complex issues relating to securities settlement, custody and investor rights, combining transactional expertise with regulatory insight. Our integrated team is particularly active at the intersection of traditional market infrastructures and financial innovation. For further discussion or guidance, please contact Pierre Berger (Pierre.Berger@dlapiper.com) or Louise Van Marcke (Louise.Vanmarcke@dlapiper.com).

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