INTRODUCTION
This article presents the findings of research on the historical development of instruments of the stock market and the place occupied by securities within this process. "Financial instruments" herein refer to that with which an interested party approaches the public (the stock market) for the purpose of attracting resources to form capital. Financial instruments are analyzed from the perspective of their legal essence, which jurists most commonly express through such categories as securities, documents, or rights. Equally, it can be said that financial instruments in this context are understood from the perspective of the section of legislation concerning objects of commercial transactions (e.g., sale, exchange) or objects of subjective rights (ownership, pledge) (Art. 128 of the Civil Code [CC]). In global practice, the lion's share of these instruments consists of shares and bonds. Precisely these objects of the financial market are the principal representatives of the instruments of this market for us.
This article posits that the historical development of financial instruments encompasses four periods: rights, documents, securities, and valuable rights. These periods, in turn, form two epochs: the non-securities era and the securities era. Furthermore, economic analysis (law & economics) allows us to conclude that a document should be recognized as a security not so much because it represents the possibility of obtaining value, but rather due to the establishment of special rules governing it, which render the position of its owner and other participants in relations concerning such a document economically more efficient. A security reduces social costs and, primarily for this reason, possesses value (social value).
We live in the securities era, and it is sometimes difficult for us to imagine that shares and bonds were once NOT securities. Financial instruments were traded for centuries before investment documents were endowed with the properties of securities. This should signify that securities should be viewed as one of many possible forms of existence of stock market instruments.
THE EMERGENCE OF THE STOCK MARKET
It is commonly accepted that the starting point for the history of the stock market is the establishment of the stock exchange in Amsterdam in 1602. However, according to Braudel, it is not entirely correct to call Amsterdam the first capital market, as shares in public debt were traded even before 1328 in city-states such as Venice, Florence, and Genoa. Moreover, the author continues, one cannot fail to mention the trade in shares in German mines in Leipzig, as well as the trade in municipal participation shares (rentes sur l'Hotel de Ville) in France, which occurred as early as the 16th century. What was new in Amsterdam was the volume, liquidity, and publicity of the market, along with the freedom of speculative transactions thereon. Besides the organizational component, by the beginning of the 17th century, a notable diversity of Investment Financial Instruments (IFIs) had developed, the main part of which consisted of shares in state and municipal debts, as well as shares in the Dutch East India Company. Soon, the practice formed in Holland, along with other aspects of commerce and finance, was replicated in England. According to a prominent British historian, "by the end of the 17th century, London had an open and highly organized market for shares and interests in companies."
Shares in the public debt of Italian city-states during Renaissance were not represented by any documents; they were traded as such, as rights of claim against the city. The transfer of these rights (shares) was effected by making corresponding entries in a ledger maintained by the city itself. Besides transfer, it was possible to make entries regarding the pledge of the respective share, which attests to the sufficient development of the market at that time. Trade in shares of the Dutch East India Company was also conducted by making entries in the company's ledgers. These ledgers originated from the category of internal accounting documents but, by virtue of being endowed with a public function, they secured trust in the market.
FROM LEDGER TO DOCUMENT
According to a common view, the beginning of paper representation is associated with the 17th–18th centuries. At the same time, in merchant practice, paper-based credit circulation had already existed for a considerable period: bills of exchange began to be used in practice around the 13th–14th centuries. The contentiousness of the opinion regarding the late inclusion of documents in investment trading is linked to the ambiguity in understanding the terms "stock" and "shares." Professor Rogers writes: "In the 17th and 18th centuries, as now, such words could refer either to a right in relation to an enterprise or to a paper representing such a right. At that time, finding references to trading in shares of stock ('shares of stock') presented no difficulty; what remains unclear is whether the right corresponding to this share was embodied in a document, and whether the transfer of the right was effected by handing over this document." Rogers, however, subsequently concludes that in practice, both forms of transfer were likely used: one by making an entry, the other by handing over a document.
Evidently, the external legal embodiment of IFIs (right or document), and consequently the model of their transfer (by entry or by delivery), depended on the specific situation and was at the discretion of the persons initiating the formation of capital. In legal terms, this means that the norm concerning the form of stock market instruments was dispositive.
Additionally, one cannot forget the significance that the document held during that period. It is now difficult to imagine that the transfer of contractual claims was completely non-existent and could not exist due to a strict prohibition on the assignment of rights of claim. The exception was the field of commerce, where rights, through their "documentization," acquired the qualities of things in people's perceptions. In a way, rights were "reified." Outside this exceptional zone, the possibility of assigning contractual rights in many countries only received the green light at the beginning of the last century: for example, in England with the adoption of the Law of Property Act 1925, and in Germany after the Civil Code (Bürgerliches Gesetzbuch) of 1896 came into force.
Meanwhile, the regulation of documents used in capital formation on the stock market still lacked any special qualities. This state of affairs continued until the 19th century when investment documents gradually transformed into securities. This means that before shares/bonds became securities, a path spanning five centuries (from the 14th to the 19th century) had to be traversed. Taking the entire history of trading investment instruments, then, in Professor Rogers' inverse expression, "The reign of securities is relatively recent and short."
FROM DOCUMENT TO SECURITY
Thus, in the investment sphere, the document became a security quite late (for example, in American law, a share acquired the qualities of a security only with the adoption of the Uniform Stock Transfer Act of 1910). Interestingly, the transformation of documents into securities occurred in many countries in a very similar manner, by extending the rules of bill of exchange legislation to investment documents, which by the 19th century had already been thoroughly tested by both national and international practice.
Simple corporate and state/municipal bonds could readily be assimilated to bills of exchange and thus acquire the negotiability based on the general principles of bill of exchange law. Full negotiability of IFIs, however, long sought its realization. In particular, at the end of the 19th century, US government authorities routinely described share certificates as "quasi-negotiable," referring to their distinction from bills of exchange or bonds in that share certificates are not the sole evidence of the rights embodied therein – the "monument of title." A share certificate did not truly become the reification of shareholder rights until the adoption of the aforementioned Uniform Stock Transfer Act.
The concept of a security equals the sum of two components: the document and the characteristics of negotiability. In other words, a document becomes a security upon the establishment of a legal regime for it, which includes a set of negotiability characteristics. This set consists of the following legal characteristics:
1. Special Legitimation. According to general norms, establishing the fact that a specific right belongs to a given person (legitimation) requires ascertaining a significant number of circumstances: from whom the property was acquired, whether the alienator had rights to it, whether the alienation transaction was valid. Moreover, these questions must be answered as many times as the property has passed from one person to another. The indeterminacy of the scope of such circumstances gives rise to an effect of inconclusiveness in legitimation findings – unforeseen circumstances can always "surface." For securities, special rules on legitimation are provided, aimed at simplifying this verification and consisting in indicating limited and easily ascertainable circumstances, the presence of which establishes a person as the subject of the right (e.g., in the case of a bearer security, the subject is legitimized simply by possession of the security (Art. 145 CC)).
2. Literality. In a normal situation, the source of information about the legal relationship between the parties can be various types of evidence (written, oral, material). In such cases, legally significant information becomes dispersed. For the concept of a security, it is necessary that for a given right, including its creation, transfer, or exercise, a strictly defined document is of essential significance (Art. 142 CC). A consequence of this requirement is the localization of necessary information, which brings precision and clarity to the relevant relations.
3. Formalization. In contractual relationships, participants in commerce are free in the form and methods of expressing their agreements. The resulting problem of interpretation is compensated by the court's right to take into account all relevant circumstances, including pre-contractual negotiations and correspondence (Art. 431 CC). In the case of securities, ambiguity is substantially reduced through strict regulation of the form and requisites of securities (Para. 1, Clause 1, Art. 142 CC), as well as detailed normative description of the rights expressed therein (Clause 1, Art. 144 CC, and, in particular, the Regulations on Promissory Notes and Bills of Exchange).
4. Autonomy. In a normal situation, the burden of proving that a claim exists rests on the creditor: he who claims, proves (Art. 312 CC). With securities, the situation is different. A presumption is established for them that the claim under the security exists until the debtor proves otherwise. This characteristic of a security shifts the burden of proof to the debtor, thereby placing the creditor in a more advantageous position (Para. 1, Clause 2, Art. 147 CC).
5. Abstractness. According to general rules, the debtor must verify the validity of all acts of transfer that have occurred in relation to the claim presented against him (Art. 312 CC). Again, with securities, a completely different picture is observed. When performing obligations to the person authorized under the security (Art. 145 CC), the debtor (1) has neither the right nor the duty to demand that the legitimized person provide proof of the basis upon which the document passed to the bearer, and (2) is released from further liability, even if it subsequently turns out that the security passed to the holder not from the owner (Para. 2, Clause 2, Art. 147 CC).
6. Public Reliability. A person who acquires a security in good faith, relying on its content, acquires the right expressed therein as it appears according to this content. The law equates the outward appearance of a right to the actual existence of the right in relation to bona fide third parties. A person who in good faith relied on this appearance of a right and accepted it as an existing right should not suffer any loss.
Thus, based on the listed characteristics of securities, the following conclusions can be drawn. During an exchange, participants in commerce are obliged to verify whether the right actually exists, what its content is, and whether it belongs to the given person. In terms of economic analysis, these persons are forced to bear the costs of gathering and assessing information (so-called information costs). In real life, such costs can sometimes be avoided, particularly due to personal relationships with the counterparty or market signals; however, in large transactions, the need to verify the mentioned information most often remains. The institution of securities is aimed at reducing the very necessity of bearing these costs. This task is achieved through:
a) Localization of the information source (literality);
b) Limiting the volume of necessary information to be gathered (legitimation, autonomy, abstractness); and
c) Simplifying the processing and evaluation of the relevant information (formalization, public reliability).
The extension of the ideology of securities-based cost reduction to financial instruments indicates that at a certain stage of stock market development, a need arose to enhance its economic efficiency, one method of which is reducing the corresponding information costs. Legal intervention in the form of the institution of securities effectively increases the value of the right embodied in the paper – apparently, this should serve as the modern explanation for why paper is called valuable (tsennaya).
Thus, the third historical period is marked by stock market instruments acquiring an evolutionarily more perfect form – the form of investment securities.
FROM SECURITY TO VALUABLE RIGHTS
The securities period for financial instruments did not last long. After the paper crisis that occurred in the USA at the end of the 1960s, coupled with the concurrent need to create a European bond market, it became evident that for the development of the capital market, it was necessary to rid itself of the paper form.
Professor Goode cites four shortcomings of the documentary form of stock market instruments. Firstly, their issuance and physical movement involve a large amount of paper, which has recently grown to such proportions that it threatens to overload the settlement and clearing system. Secondly, producing certificates for stock market instruments is expensive, as it requires quality incorporating numerous technical features designed to prevent counterfeiting. Thirdly, instruments in this form are risky because ownership is transferred by mere delivery; therefore, if a certificate is stolen, the person who committed the theft can transfer a stronger title (ownership right) to a bona fide purchaser. Fourthly, the applicable law will be the place where ownership of such an instrument is transferred; therefore, in the case of instruments circulating across several jurisdictions, investors seeking to form a portfolio must consequently account for diverse national laws, each with its own requirements and priorities concerning the execution of transfers.
Thus, with the increase in the volume and speed of trading, the paper form of stock market instruments became an unbearable burden, forcing a transition to electronic recording of these instruments. In the second half of the 20th century, phenomena such as the dematerialization of securities, immobilization of securities, global certificates, and settlement and clearing companies emerged in developed legal systems. All these phenomena, much like the "documentazion" of stock market instruments before them, are aimed at enhancing the efficiency of the stock market, but now by reducing the costs associated with processing document circulation, which once allowed a breakthrough in the stock market.
Meanwhile, moving away from the document did not entail abandoning the negotiability characteristics of the corresponding financial instruments. Proof of this can be found in the norms of modern Russian legislation. For dematerialized (or immobilized) stock market instruments, all negotiability characteristics have been preserved:
1. Special legitimation (the right holder is established based on registry or account data, Art. 28 of the Law on the Securities Market [LSM]),
2. Literality (Art. 2 LSM defines the "decision on the issue of securities" as a "Document containing data sufficient to establish the scope of rights secured by the security");
3. Formalism (Art. 17 LSM details the content of the decision on the issue of securities; specifically, the Law on Joint-Stock Companies [JSC Law] and Securities Issuance Standards stipulate the terms of such issues);
4. Autonomy (according to Art. 18 LSM, an issue-grade security secures property rights to the extent established in the decision on the issue of these securities);
5. Abstractness (under the meaning of the LSM and JSC Law, the issuer is guided by the list of security holders; it is not obliged to verify the accuracy of this list's data, including checking the validity of contracts based on which the corresponding entries were made in the register of security holders);
6. Public reliability (according to Art. 18 LSM, for issue-grade securities in non-documentary form, the decision on the issue of securities is the document certifying the rights secured by the security).
The application of those mechanisms for reducing information costs, which were created within the framework of the institution of securities, to "computerized" (dematerialized or immobilized) stock market instruments allows us, in this sense, to speak of an era of valuable rights. Such rights are proposed to be understood as rights to which the characteristics of negotiability have been applied. In this case, the pattern of the evolutionary development of financial instruments can be represented as follows: 14th–17th centuries (Rights), 17th–19th centuries (Documents), 19th–20th centuries (Securities), mid-20th century to present (Valuable Rights).
CONCLUSION
This article has been devoted to the historical development of stock market instruments, demonstrating that these instruments have successively CHANGED the following legal forms: rights, documents, securities, and valuable rights. For lawyers, this conclusion may prove useful in overcoming the stereotypical (template) identification of shares, bonds, and other stock market instruments with securities, while for economists, it opens the possibility for further analysis of institutions reducing information and other costs arising in the stock market.
This article presents the findings of research on the historical development of instruments of the stock market and the place occupied by securities within this process. "Financial instruments" herein refer to that with which an interested party approaches the public (the stock market) for the purpose of attracting resources to form capital. Financial instruments are analyzed from the perspective of their legal essence, which jurists most commonly express through such categories as securities, documents, or rights. Equally, it can be said that financial instruments in this context are understood from the perspective of the section of legislation concerning objects of commercial transactions (e.g., sale, exchange) or objects of subjective rights (ownership, pledge) (Art. 128 of the Civil Code [CC]). In global practice, the lion's share of these instruments consists of shares and bonds. Precisely these objects of the financial market are the principal representatives of the instruments of this market for us.
This article posits that the historical development of financial instruments encompasses four periods: rights, documents, securities, and valuable rights. These periods, in turn, form two epochs: the non-securities era and the securities era. Furthermore, economic analysis (law & economics) allows us to conclude that a document should be recognized as a security not so much because it represents the possibility of obtaining value, but rather due to the establishment of special rules governing it, which render the position of its owner and other participants in relations concerning such a document economically more efficient. A security reduces social costs and, primarily for this reason, possesses value (social value).
We live in the securities era, and it is sometimes difficult for us to imagine that shares and bonds were once NOT securities. Financial instruments were traded for centuries before investment documents were endowed with the properties of securities. This should signify that securities should be viewed as one of many possible forms of existence of stock market instruments.
THE EMERGENCE OF THE STOCK MARKET
It is commonly accepted that the starting point for the history of the stock market is the establishment of the stock exchange in Amsterdam in 1602. However, according to Braudel, it is not entirely correct to call Amsterdam the first capital market, as shares in public debt were traded even before 1328 in city-states such as Venice, Florence, and Genoa. Moreover, the author continues, one cannot fail to mention the trade in shares in German mines in Leipzig, as well as the trade in municipal participation shares (rentes sur l'Hotel de Ville) in France, which occurred as early as the 16th century. What was new in Amsterdam was the volume, liquidity, and publicity of the market, along with the freedom of speculative transactions thereon. Besides the organizational component, by the beginning of the 17th century, a notable diversity of Investment Financial Instruments (IFIs) had developed, the main part of which consisted of shares in state and municipal debts, as well as shares in the Dutch East India Company. Soon, the practice formed in Holland, along with other aspects of commerce and finance, was replicated in England. According to a prominent British historian, "by the end of the 17th century, London had an open and highly organized market for shares and interests in companies."
Shares in the public debt of Italian city-states during Renaissance were not represented by any documents; they were traded as such, as rights of claim against the city. The transfer of these rights (shares) was effected by making corresponding entries in a ledger maintained by the city itself. Besides transfer, it was possible to make entries regarding the pledge of the respective share, which attests to the sufficient development of the market at that time. Trade in shares of the Dutch East India Company was also conducted by making entries in the company's ledgers. These ledgers originated from the category of internal accounting documents but, by virtue of being endowed with a public function, they secured trust in the market.
FROM LEDGER TO DOCUMENT
According to a common view, the beginning of paper representation is associated with the 17th–18th centuries. At the same time, in merchant practice, paper-based credit circulation had already existed for a considerable period: bills of exchange began to be used in practice around the 13th–14th centuries. The contentiousness of the opinion regarding the late inclusion of documents in investment trading is linked to the ambiguity in understanding the terms "stock" and "shares." Professor Rogers writes: "In the 17th and 18th centuries, as now, such words could refer either to a right in relation to an enterprise or to a paper representing such a right. At that time, finding references to trading in shares of stock ('shares of stock') presented no difficulty; what remains unclear is whether the right corresponding to this share was embodied in a document, and whether the transfer of the right was effected by handing over this document." Rogers, however, subsequently concludes that in practice, both forms of transfer were likely used: one by making an entry, the other by handing over a document.
Evidently, the external legal embodiment of IFIs (right or document), and consequently the model of their transfer (by entry or by delivery), depended on the specific situation and was at the discretion of the persons initiating the formation of capital. In legal terms, this means that the norm concerning the form of stock market instruments was dispositive.
Additionally, one cannot forget the significance that the document held during that period. It is now difficult to imagine that the transfer of contractual claims was completely non-existent and could not exist due to a strict prohibition on the assignment of rights of claim. The exception was the field of commerce, where rights, through their "documentization," acquired the qualities of things in people's perceptions. In a way, rights were "reified." Outside this exceptional zone, the possibility of assigning contractual rights in many countries only received the green light at the beginning of the last century: for example, in England with the adoption of the Law of Property Act 1925, and in Germany after the Civil Code (Bürgerliches Gesetzbuch) of 1896 came into force.
Meanwhile, the regulation of documents used in capital formation on the stock market still lacked any special qualities. This state of affairs continued until the 19th century when investment documents gradually transformed into securities. This means that before shares/bonds became securities, a path spanning five centuries (from the 14th to the 19th century) had to be traversed. Taking the entire history of trading investment instruments, then, in Professor Rogers' inverse expression, "The reign of securities is relatively recent and short."
FROM DOCUMENT TO SECURITY
Thus, in the investment sphere, the document became a security quite late (for example, in American law, a share acquired the qualities of a security only with the adoption of the Uniform Stock Transfer Act of 1910). Interestingly, the transformation of documents into securities occurred in many countries in a very similar manner, by extending the rules of bill of exchange legislation to investment documents, which by the 19th century had already been thoroughly tested by both national and international practice.
Simple corporate and state/municipal bonds could readily be assimilated to bills of exchange and thus acquire the negotiability based on the general principles of bill of exchange law. Full negotiability of IFIs, however, long sought its realization. In particular, at the end of the 19th century, US government authorities routinely described share certificates as "quasi-negotiable," referring to their distinction from bills of exchange or bonds in that share certificates are not the sole evidence of the rights embodied therein – the "monument of title." A share certificate did not truly become the reification of shareholder rights until the adoption of the aforementioned Uniform Stock Transfer Act.
The concept of a security equals the sum of two components: the document and the characteristics of negotiability. In other words, a document becomes a security upon the establishment of a legal regime for it, which includes a set of negotiability characteristics. This set consists of the following legal characteristics:
1. Special Legitimation. According to general norms, establishing the fact that a specific right belongs to a given person (legitimation) requires ascertaining a significant number of circumstances: from whom the property was acquired, whether the alienator had rights to it, whether the alienation transaction was valid. Moreover, these questions must be answered as many times as the property has passed from one person to another. The indeterminacy of the scope of such circumstances gives rise to an effect of inconclusiveness in legitimation findings – unforeseen circumstances can always "surface." For securities, special rules on legitimation are provided, aimed at simplifying this verification and consisting in indicating limited and easily ascertainable circumstances, the presence of which establishes a person as the subject of the right (e.g., in the case of a bearer security, the subject is legitimized simply by possession of the security (Art. 145 CC)).
2. Literality. In a normal situation, the source of information about the legal relationship between the parties can be various types of evidence (written, oral, material). In such cases, legally significant information becomes dispersed. For the concept of a security, it is necessary that for a given right, including its creation, transfer, or exercise, a strictly defined document is of essential significance (Art. 142 CC). A consequence of this requirement is the localization of necessary information, which brings precision and clarity to the relevant relations.
3. Formalization. In contractual relationships, participants in commerce are free in the form and methods of expressing their agreements. The resulting problem of interpretation is compensated by the court's right to take into account all relevant circumstances, including pre-contractual negotiations and correspondence (Art. 431 CC). In the case of securities, ambiguity is substantially reduced through strict regulation of the form and requisites of securities (Para. 1, Clause 1, Art. 142 CC), as well as detailed normative description of the rights expressed therein (Clause 1, Art. 144 CC, and, in particular, the Regulations on Promissory Notes and Bills of Exchange).
4. Autonomy. In a normal situation, the burden of proving that a claim exists rests on the creditor: he who claims, proves (Art. 312 CC). With securities, the situation is different. A presumption is established for them that the claim under the security exists until the debtor proves otherwise. This characteristic of a security shifts the burden of proof to the debtor, thereby placing the creditor in a more advantageous position (Para. 1, Clause 2, Art. 147 CC).
5. Abstractness. According to general rules, the debtor must verify the validity of all acts of transfer that have occurred in relation to the claim presented against him (Art. 312 CC). Again, with securities, a completely different picture is observed. When performing obligations to the person authorized under the security (Art. 145 CC), the debtor (1) has neither the right nor the duty to demand that the legitimized person provide proof of the basis upon which the document passed to the bearer, and (2) is released from further liability, even if it subsequently turns out that the security passed to the holder not from the owner (Para. 2, Clause 2, Art. 147 CC).
6. Public Reliability. A person who acquires a security in good faith, relying on its content, acquires the right expressed therein as it appears according to this content. The law equates the outward appearance of a right to the actual existence of the right in relation to bona fide third parties. A person who in good faith relied on this appearance of a right and accepted it as an existing right should not suffer any loss.
Thus, based on the listed characteristics of securities, the following conclusions can be drawn. During an exchange, participants in commerce are obliged to verify whether the right actually exists, what its content is, and whether it belongs to the given person. In terms of economic analysis, these persons are forced to bear the costs of gathering and assessing information (so-called information costs). In real life, such costs can sometimes be avoided, particularly due to personal relationships with the counterparty or market signals; however, in large transactions, the need to verify the mentioned information most often remains. The institution of securities is aimed at reducing the very necessity of bearing these costs. This task is achieved through:
a) Localization of the information source (literality);
b) Limiting the volume of necessary information to be gathered (legitimation, autonomy, abstractness); and
c) Simplifying the processing and evaluation of the relevant information (formalization, public reliability).
The extension of the ideology of securities-based cost reduction to financial instruments indicates that at a certain stage of stock market development, a need arose to enhance its economic efficiency, one method of which is reducing the corresponding information costs. Legal intervention in the form of the institution of securities effectively increases the value of the right embodied in the paper – apparently, this should serve as the modern explanation for why paper is called valuable (tsennaya).
Thus, the third historical period is marked by stock market instruments acquiring an evolutionarily more perfect form – the form of investment securities.
FROM SECURITY TO VALUABLE RIGHTS
The securities period for financial instruments did not last long. After the paper crisis that occurred in the USA at the end of the 1960s, coupled with the concurrent need to create a European bond market, it became evident that for the development of the capital market, it was necessary to rid itself of the paper form.
Professor Goode cites four shortcomings of the documentary form of stock market instruments. Firstly, their issuance and physical movement involve a large amount of paper, which has recently grown to such proportions that it threatens to overload the settlement and clearing system. Secondly, producing certificates for stock market instruments is expensive, as it requires quality incorporating numerous technical features designed to prevent counterfeiting. Thirdly, instruments in this form are risky because ownership is transferred by mere delivery; therefore, if a certificate is stolen, the person who committed the theft can transfer a stronger title (ownership right) to a bona fide purchaser. Fourthly, the applicable law will be the place where ownership of such an instrument is transferred; therefore, in the case of instruments circulating across several jurisdictions, investors seeking to form a portfolio must consequently account for diverse national laws, each with its own requirements and priorities concerning the execution of transfers.
Thus, with the increase in the volume and speed of trading, the paper form of stock market instruments became an unbearable burden, forcing a transition to electronic recording of these instruments. In the second half of the 20th century, phenomena such as the dematerialization of securities, immobilization of securities, global certificates, and settlement and clearing companies emerged in developed legal systems. All these phenomena, much like the "documentazion" of stock market instruments before them, are aimed at enhancing the efficiency of the stock market, but now by reducing the costs associated with processing document circulation, which once allowed a breakthrough in the stock market.
Meanwhile, moving away from the document did not entail abandoning the negotiability characteristics of the corresponding financial instruments. Proof of this can be found in the norms of modern Russian legislation. For dematerialized (or immobilized) stock market instruments, all negotiability characteristics have been preserved:
1. Special legitimation (the right holder is established based on registry or account data, Art. 28 of the Law on the Securities Market [LSM]),
2. Literality (Art. 2 LSM defines the "decision on the issue of securities" as a "Document containing data sufficient to establish the scope of rights secured by the security");
3. Formalism (Art. 17 LSM details the content of the decision on the issue of securities; specifically, the Law on Joint-Stock Companies [JSC Law] and Securities Issuance Standards stipulate the terms of such issues);
4. Autonomy (according to Art. 18 LSM, an issue-grade security secures property rights to the extent established in the decision on the issue of these securities);
5. Abstractness (under the meaning of the LSM and JSC Law, the issuer is guided by the list of security holders; it is not obliged to verify the accuracy of this list's data, including checking the validity of contracts based on which the corresponding entries were made in the register of security holders);
6. Public reliability (according to Art. 18 LSM, for issue-grade securities in non-documentary form, the decision on the issue of securities is the document certifying the rights secured by the security).
The application of those mechanisms for reducing information costs, which were created within the framework of the institution of securities, to "computerized" (dematerialized or immobilized) stock market instruments allows us, in this sense, to speak of an era of valuable rights. Such rights are proposed to be understood as rights to which the characteristics of negotiability have been applied. In this case, the pattern of the evolutionary development of financial instruments can be represented as follows: 14th–17th centuries (Rights), 17th–19th centuries (Documents), 19th–20th centuries (Securities), mid-20th century to present (Valuable Rights).
CONCLUSION
This article has been devoted to the historical development of stock market instruments, demonstrating that these instruments have successively CHANGED the following legal forms: rights, documents, securities, and valuable rights. For lawyers, this conclusion may prove useful in overcoming the stereotypical (template) identification of shares, bonds, and other stock market instruments with securities, while for economists, it opens the possibility for further analysis of institutions reducing information and other costs arising in the stock market.