The terms this analysis reasons in, defined plainly and cross-referenced to where they are used. A living document; entries are added as the writing develops.
The framework
- The Inheritance Test
- A framework for assessing ownership. It establishes what a holder actually owns, and whether the wrapper is the right one for the instrument’s binding constraint, by running a structure through three gates — economic, legal, and jurisdictional. The framework →
- Directional inheritance
- The governing principle: properties flow up from the underlying to the wrapper, never down. A wrapper inherits what its underlying has; it cannot bestow what the underlying lacks. See: the principle →
- The true underlying
- The thing a wrapper actually inherits from. Where exposures are pooled, the pool — not any single component — is the true underlying, and it has properties, such as diversification, that no component has. See: the axiom →
- The three gates
- The sequence a structure is run through. Gate 1, economic inheritance (liquidity, risk transformation, markability); Gate 2, legal inheritance, the in-rem question; Gate 3, jurisdictional realisation (settlement finality and recognised ownership-locus). A Gate 1 failure is dispositive. See: the three gates →
- Claim-conversion point
- The first layer in a holding chain at which an ownership right becomes a contractual claim against an intermediary. Everything downstream of it is creditor risk wearing the asset’s name. The count of layers matters less than where, if anywhere, this conversion occurs. See: the claim-conversion rule →
Concepts
- The Wrapper Fallacy
- The belief that the wrapper changes what is inside it. It does not: the wrapper inherits the liquidity of the underlying asset, not the other way around. Tokenisation, securitisation, and listed certificates all carry the implicit promise, and none of them keeps it. See the essays: The Wrapper Fallacy, Parts I & II →
- The in-rem question
- Whether the holder owns the asset (a property right, good against the world and in insolvency) or holds a claim against an intermediary (a contractual right, good only against that party). A governing-law clause answers the contractual question; it does not answer this one. See the essay: Who Holds the Asset? →
- Packaging wrapper
- A wrapper that restructures economics — pooling, tranching, or repackaging exposures into a new instrument. Securitisations, structured notes, and tracker certificates are packaging wrappers, tested at Gate 1. See: two families of wrapper →
- Registration wrapper
- A wrapper that changes only how ownership is recorded and how an instrument settles. Tokens, CSD book-entries, and manual registers are registration wrappers, tested at Gate 3. They change settlement and ownership-locus and nothing economic. See: two families of wrapper →
- Tokenised direct ownership
- A structure in which the token is constructed to be the title itself, so that transferring the token transfers ownership of the asset, under a law that recognises it — the Liechtenstein TVTG or the Swiss DLT Act. The one form that clears the in-rem gate. See: worked cases →
- Mislabelling (right structure, wrong claim)
- A sound structure marketed as something it is not — most often a claim sold as ownership. The defect is in the description, not the form; the remedy is disclosure, not redesign. See: the verdict →
Instruments & regimes
- Tracker certificate / AMC
- A debt instrument giving economic exposure to an underlying or a managed strategy. A packaging wrapper: it can repackage exposure, but it does not manufacture the underlying’s liquidity or markability. See the essay: Dressed for Trading →
- Wertrecht / ledger-based security
- An uncertificated right recorded in a register or on a ledger, whose transfer is effected by the register entry itself. Under the Liechtenstein TVTG and the Swiss DLT Act, the ledger-based form can carry the ownership right — the legal basis for tokenised direct ownership.
- TVTG
- The Liechtenstein Token and TT Service Provider Act, in force 2020. Its container model lets a token hold a right — including title to an asset — such that disposing of the token disposes of the right. A model for token property law.
- Swiss DLT Act
- The Swiss framework (2021) introducing ledger-based securities, giving on-chain registration a recognised locus of ownership under Swiss law.