SECURITIES AND CREDIT OPERATIONS: CHARACTERISTICS, EXAMPLES - ARTE - 2025

The titles and credit operations are instruments, supported on a paper and duly signed, that carry and record the action of a private right. Therefore, only whoever has that particular document can execute the right in question.

Each credit instrument is made up of the medium that registers it and a specific value: both elements are inseparable. When the right is communicated, the document is transferred and vice versa. In any case, the scope of the credit titles will depend on the regulations of each particular country.

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Therefore, these documents are essential, since without the credit title, the right they hold cannot be claimed, because they are the ones that confer active legitimacy on their legitimate owner or holder. They can be bearer, registered or to order.

The credit operations that the law regulates are acts of commerce. The credit titles are commercial entities. Its issuance, issuance, acceptance or guarantee, and the other operations that are consigned in them, are acts of commerce.

Historical background

The titles and credit operations correspond to an invention made in the Middle Ages and the Renaissance by Italian merchants, since they were used as valuable documents at that time, which represented money and were protected by personal signatures of those who used them.

They were very useful to transfer large amounts of money throughout Europe, without having the need to carry metallic silver or gold coins.

As you might expect, each credit instrument has arisen at a different point in business history. For this reason, they have been studied and regulated taking into account the particularities of each stage.

However, jurisconsults have been making great efforts to seek to unify the theory since the beginning of the 20th century, and it is in this way that all these documents have entered this same category of credit titles.

characteristics

Incorporation

These types of documents incorporate a right, for which both are closely tied and to execute it, it is only necessary that the first is shown.

That is, if the title of credit is not exhibited before a person, it will not be allowed to exercise the right it incorporates. In the same way, the simple fact of having one indicates that you have the other.

Legitimation

This characteristic is a consequence of the previous element. In order to exercise the right that is incorporated in the credit title, the owner of the same must legitimize it after showing it

This can happen in an active way, by demanding the duty of payment, or passively, where the debtor fulfills his obligation when the first one to show the corresponding document.

Autonomy

Every owner of the document obtains a right that is restored, which does not come from the right that the previous one had or from the relationships or restrictions between its issuer and him.

When someone receives a title of credit, they automatically become the first owner. In the same way, each signatory has a different, independent and autonomous obligation from that which the subscriber may have had.

The document is autonomous from the original credit that served as the basis for its granting. Each successive holder is obtaining the right in a different and proper way in relation to who transferred it.

Literality

It corresponds to the fact that the right that is incorporated in the title of credit is regulated by means of the word, by what the person who issues it has written in it. Therefore, the claim is limited to what is strictly indicated in the title.

For example, If you indicate that you must pay in a certain currency, then the payment method will be that, and not another.

This does not mean that there are no limitations, because the legislation can nullify certain documents, just as other documents can also contradict them.

Circulation

Many authors do not admit this feature, since it mentions the destination of all credit titles, which is to transit, to be transferred from one person to another. This generates a qualification that recognizes the titles to the order and nominative.

Importance of credit titles

Commerce is an activity where there is an intermediation between consumers and producers, in which credit involves the greatest importance in commercial operations.

In today's world, credit titles are essential to allow access to credit and facilitate the circulation of products, ensuring whoever grants it the guarantee of being able to collect.

If an individual writes a check to pay a lease, the issuance of the check is made by the presence of a contractual relationship, the rental agreement.

However, with the issuance of the check, a new relationship arises between him and his creditor, independent of the contract that served as the motive.

The difference between a contract and a credit title is that the first is a demonstration of the agreement established between both parties, giving rise to the commitment.

On the other hand, the credit instruments do not prove any prior agreement between the parties, but are constitutive. Having a credit title means that it can be collected without having to prove anything.

They serve to accelerate commercial activity, because they can be easily transferred from one holder to another, being used to pay commitments and provide security of a quick payment.

Examples

Bills of exchange and promissory notes are examples of credit titles classified as representative, because their regulation is specified in the legislation. On the other hand, other credit titles are said to be atypical, since they do not have a regulation defined in the laws.

Another qualification used for bills of exchange and promissory notes is related to singularity. It is expressed that the credit titles are unique when in each act they are created one by one.

The opposite case turns out to be the shares of a corporation, which are serial credits, because their creation originates in series; that is, many actions are created at the same time.

Checks are also credit titles. In this case, according to how they are transferred, it is possible to differentiate between the following:

- Titles to order, which are issued specifically in favor of a person. They are not transferable.

- Bearer titles, which do not indicate the data of the owner and therefore its effect is legitimized by its sole possession.

- Registered titles, which are direct and of limited transfer.

References

1. Julián Pérez Porto and Ana Gardey (2016). Credit Titles. Definition of. Taken from: definicion.de.
2. From Concepts (2019). Credit titles concept. Taken from: deconceptos.com.
3. Wikipedia (2019). Credit title. Taken from: es.wikipedia.org.
4. The Law Guide (2008). Credit titles. Taken from: right.laguia2000.com.
5. Dulce Aguilar (2004). Credit titles. Gestiopolis. Taken from: gestiopolis.com.