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The new system is designed to prevent theft or other unauthorized transfer, however, market reaction to these proposals was sceptical (see contributions on the ARB website).

 

The first impression that comes to mind is the question whether such unprecedented measures are really necessary to safeguard the registries. The rational approach may be, however, that this issue should be leaved to the competence of persons made responsible for this task (that is the registries administrators). If the confirmation from the destination account enables to avert some significant and by far undiscovered threats to the safety of accounts maybe this measure is really worth of considering.

This reflection is supported by the fact that recent events revealed that not all companies were able to effectively prevent theft and fraud through their own, internal control systems.

 

Another issue is, however, the setting up of the deadlines associated with a transfer—48 and 24 hours, respectively—to report a settlement of the transaction to ARB and to confirm the transfer receipt. In the present wording the deadlines don’t refer to business days, and are additionally rather short. On the other side, extending these timeframes would, in my opinion, expose the parties to excessive legal uncertainty whether the transaction is finalised and can be relied upon. To strike the right balance between these main values (legal certainty and the registries safety) isn’t, undoubtedly, the easy choice. And the need to avoid overly bureaucratic and onerous burdens shouldn’t be neglected as well.