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United Kingdom
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Securities held by a foreign bank meaning

What does Securities held by a foreign bank mean?
Describes a custody chain in which a UK or Irish bank holds securities to the order of a foreign bank for that bank’s customer (typically a foreign national). It is a descriptive expression used across banking, custody and conflict‑of‑laws practice, not a defined statutory term, and is informed by general principles of privity of contract and intermediated securities. General rule: where securities are held in an English or Irish bank to the order of a foreign bank for a foreign national’s account, there is no contractual relationship (no privity) between the foreign national and the English/Irish bank. The bank’s duties are owed to its customer (the foreign bank), and are subject to the bank’s terms, lien and set‑off. The foreign national’s rights are ordinarily against the foreign bank; any beneficial or proprietary interest does not, without more, create privity with the English/Irish bank. Practical points include enforcement, disclosure and security taking: steps usually target the foreign bank or rely on proprietary remedies. Direct rights may arise only if the English/Irish bank acknowledges the investor as account holder, or via assignment, novation, or an express trust/nominee arrangement. This position is broadly consistent across England & Wales, Scotland, Northern Ireland and Ireland.
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