TY - JOUR
TI - Unbundeled Shares: Circumventing Corporate Nationality Rules Through Swaps, Options and Other Devices
AU - Geronimo, Russell Stanley Q.
TI - Unbundeled Shares: Circumventing Corporate Nationality Rules Through Swaps, Options and Other Devices
AB - Corporate nationality clauses have a simple and seemingly innocuous language: “corporations at least X per centum of whose capital is owned by Filipino citizens”. This presupposes that “capital” is a unified bundle of economic and control rights. However, modern finance and contract law can “unbundle” economic rights from control rights through the use of options, swaps, forwards, hybrid instruments, variable interests, and a vast catalogue of contractual arrangements. Unbundled economic rights allow foreign investors to have economic interest without ownership of shares, and unbundled control rights allow foreign minority stockholders to have effective control without majority of voting rights. Does this circumvent foreign equity limitations? Do the control test, beneficial ownership doctrine and other corporate nationality rules render them illegal?
VL - 2018
IS - Issue 11 (3)/2018
PY - 2018
C1 - 2299-6834
SP - 13
EP - 45
DO - 10.4467/22996834FLR.18.014.9304
UR - https://ejournals.eu/en/journal/financial-law-review/article/unbundeled-shares-circumventing-corporate-nationality-rules-through-swaps-options-and-other-devices
KW - Corporate nationality rules
KW - unbundled shares