10.

It is therefore necessary to investigate whether the compulsory deposit of securities with an approved bank is contrary to the provisions of the directive adopted for the implementation of Article 67 (1). It is common ground that the capital movements in question are governed by Article 2 of the directive and by List B of Annex I thereto. ‘In the case of the movements covered by Lists A and B’ the Court stated that ‘unconditional liberalization is prescribed by the directives’(Casati, paragraph 11). That liberalization, however, must take effect subject to the limits, which need to be defined, of the abolition of restrictions effected by the directive. In this instance it will be for the national court to determine, in the light of the interpretation of Community rules to be provided by the Court, whether the Italian legislation permits ‘the conclusion or performance of transactions’ and ‘transfers between residents of Member States’ relating to ‘operations in securities’ making possible the ‘acquisition by residents of foreign securities dealt in on a stock exchange and use of the proceeds of liquidation thereof’, including ‘physical movements of the securities mentioned above’. It has not been argued that the measure at issue prohibits or even restricts the acquisition by residents of foreign securities dealt in on a stock exchange. Clearly, it has been possible for the capital movements necessary for such acquisitions to take place in the normal way and there is nothing to support the assertion that the measure mentioned above represents an obstacle to use of the proceeds of any liquidation of the securities involved. What of the ‘physical movements of the securities’, and, more specifically, what ‘operations in securities’ are covered by such an expression? Does it mean, as the plaintiffs argue, the importation of the foreign securities into the purchaser's State of residence in order for him to hold them physically? I do not believe that the framers of the Community legislation had in mind such a transfer, which runs counter to a steady development whereby the rights of the owner of a security have lost their material character. The right of ownership has increasingly become separated from the security itself and assumed scriptory form in the account books of banks. Therefore, in my view, the physical movements referred to in List B are those which are necessary for operations in securities and in particular to their negotiation. ( 1 ) The compulsory deposit would therefore be incompatible with the requirements of the directive only if it hindered capital movements and, in such a case, only to the extent to which they were hindered. From that point of view, national legislation prohibiting the export of foreign securities dealt in on a stock exchange when their export was necessary in order for them to be negotiated for the purpose of acquisition would be incompatible with the directive. However, in so far as it does not affect the capital movements liberalized so far, legislation requiring purchased securities to be deposited with an approved bank does not, in my view, encroach upon the area unconditionally liberalized by the directive. Therefore, the measure at issue falls within the competence which, in the present state of Community law, still belongs to the Member States. I therefore consider that the Member States may adopt such a measure without the need to have recourse to one of the procedures laid down in Articles 73 or 108 of the Treaty and that they may prescribe penal sanctions for failure to comply with it.