More than a matter of trust: the German Debt Securities Act 2009 in international perspective

Bondholder law regulates the rights of the holders of debt securities such as bonds and debentures. One of its most important functions is to mediate the tension between holders of debt securities and holders of equity securities such as shares. Further, it mediates bondholders’ interests with those of ordinary creditors in insolvency, with national and regional interests in distressed companies, and with the need for certainty and efficiency in the capital markets. The mechanisms bondholder law typically utilizes are the formation of bondholders into an organ of collective action and their common representation by a financial intermediary. This article examines the German Schuldverschreibungsgesetz or Debt Securities Act of 2009 with particular focus on the mechanisms of collective action and collective representation. It compares the provisions of the 2009 Act with its predecessor, the Debt Securities Act of 1899 and with common law bondholder statutes.