I don't understand how "such chains of trusts of the equitable proprietary interest is very significant commercially in respect of trusts of securities and of the rights to such securities. What are the most basic, intelligible examples of this? I don't know much about "securities" either...I'm just familiar with Exchange Traded Funds and stocks.

(ii) Trustees’ rights

Once Adam has conveyed the land to Brenda and Clare, they will have joint legal title to it and will be treated at Law as the joint owners of the property. Since, however, they hold the property on trust, they will not have a beneficial interest in the property. The existence of the trust strips the trustees of the benefits of legal ownership.
      Although many trusts involve the trustee having legal title to property, this is not always the case. It is possible to declare a trust of an equitable proprietary interest in property. So, for example, a beneficiary of a trust is able to declare that they hold their equitable proprietary interest on trust for another. It follows that there can be a chain of trusts. So, for example, money might be transferred to Emma to hold on trust for Frank. He might declare a trust of his equitable proprietary interest for Grace. So Emma has the legal title to the money that is held on trust for Frank, who holds his equitable interest on trust for Grace. This chain could continue indefinitely. It is only the trust of the money held by Emma for Frank that involves a trust of legal rights; all of the other trusts will involve a trust of the beneficiary’s equitable interest in the money that is held on trust for them.40 The possibility of creating such chains of trusts of the equitable proprietary interest is very significant commercially in respect of trusts of securities and of the rights to such securities.

Virgo, The Principles of Equity & Trusts 2020 4 edn. Page 47. All emboldenings and italics are mine.

  • @DavidSiegel I proposed an edit to the subject to change "boundless" to "long" which was approved but then you have changed it back to "boundless". My rationale for changing it to "long" is that the actual quotation which the OP is asking about is a "chain of trusts" - i.e. a series of trusts - and the OP is asking for an example of what the author is referring to. The author is not talking about a chain of trusts of infinite length so It seems very unlikely that the OP is actually asking about infinite length chains of trusts.
    – Nemo
    Commented Nov 1, 2021 at 10:47
  • @Nemo, the OP may have been mistaken, but it seemed to me that teh change altred the meanign of OP's question, which we usually don't do here, But if yiu like I will open a meta thread on the subject. Commented Nov 1, 2021 at 15:14
  • @DavidSiegel I was taking the text of the question to be the question itself and correcting the subject to correspond to the text of the question. A bit like changing the headline of a newspaper article to match the actual article
    – Nemo
    Commented Nov 1, 2021 at 15:21
  • @Nemo, ok I will review the text Commented Nov 1, 2021 at 15:22
  • @Nemo, I have rolled back my rollback, leaving your "long" in place", The OP can object is s/he sees fit. Commented Nov 1, 2021 at 15:36

1 Answer 1


Most publicly traded securities are held through chains of beneficial interests. Typically the share or bond certificates are held in the name of a nominee company which in turn are held by a brokerage for the benefit of its customers, and not infrequently the brokerage account is in turn owned by a revocable trust or other trust for the benefit of the beneficial owners.

The commercial reality is discussed in the official comments and memorandum discussions of Article 8 of the Uniform Commercial Code in the United States. Shares held in nominee form all called "street name securities" in the U.S. and the U.K.

Ownership of mortgages sold in the secondary market in the U.S. is handled similarly. The original lender typically transfers nominal status as holder of the note obligation to MERS, a nominee firm, that in turn is held by a trust that owns a pool of mortgages called a mortgage backed security, that is in turn owned by secondary market investors through brokerage account trusts and often through personal trusts or a charitable pooled trust for the benefit of ultimate beneficial owner charities. See here.

Commodities such as gold are often traded this way as well, either in the system above and under a parallel system of negotiable warehouse receipts.

While the legal environment in the U.K. for securities ownership is not identical, the basic economic reality of multiple layers of indirect ownership is the norm there as well.

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