The promissory note – is one of the main financial tools of debt securities’ market. The promissory note is a reliable tool for conducting deals between business entities. At the same time it is a beneficial investment tool for saving and increasing of free capitals. At its core it is a universal payment instrument, successfully replacing cash and non-cash money. It is convenient to take credits with its help, safe to give loans, fast and easy make payments without expensive mediation of credit-financial organizations. The promissory note guarantees the security of invested money and helps to increase it. Combining high safety and profitability it is a beneficial alternative to bank deposits, corporate and government bonds, mutual funds, stocks and other investment products.

The promissory note, as a form of debenture type, is the earliest form of securities. The term “Wechsel” in German means exchange. The history of appearance and spreading of bill relations in XIII-XIV centuries is connected  with trading operations. Even in the years of medieval feudalism traders and bankers appreciated the opportunities of the new debt tool for calculations, registration and obtaining loans. At the same time the basis of promissory note law were formed in Europe. In 1569 the first bill Charter was passed in Bologna (Italy). Domestic bill law was developed in line with European trends. In 1729 the first Russian bill Charter appeared. It had many common with the Leipzig bill charter from 1682. Other changes in Russian law happened in 1832, when the new document, created on the norms of French Commercial Code, was passed. The next historical step in the work of Russian legislators – the appearance of the new bill charter in 1902, which was based on the achievements of German law. In 1912 the “Hague Convention of 1912 Relating to Bills of Exchange and Promissory Notes” was approved and the “International charter of Bills of Exchange and Promissory Notes” came into force. Russia agreed to connect to this convention, but with some requirements – to have a right to create own regulations regarding bills of exchange. When the Soviet government moved to the new economic policy in 1922, the “Regulation on bills” was approved. In it the priority of bill of exchange was confirmed. In 1930 in Geneva (Switzerland) the most important international convention - a “Uniform Law For Bills of Exchange and Promissory Notes” came into force. It unified the international law standards in the sphere of bills circulation.

In 1936 the USSR entered the Geneva convention. That’s why the Russian Federation, as legal successor of the great country, is a full participant of the global Convention as well. The modern Russian bills law is based on the provisions of international law, which rules the bills circulation. The main document – the Federal Law “About The Promissory Note and Bill Of Exchange” (№48-FL from 11.03.1997) – is based on the main provisions of Geneva convention. From that time this law is the main document in regulation of bill relations and bill circulation in RF. Nowadays the bill is one of the most effective and safe tool of debt market. By its nature it is a security which has a high liquidity and profitability with low risk for the bill holder. Taking on itself the function of money the promissory note or bill of exchange have the maximum protection against counterfeiting and give to its owner an opportunity to provide safe cash and non-cash transactions, including the repayment of monetary obligations in the shortest terms. It allows to delay the moment of payment for goods, decrease the need in cash and significantly accelerates the commodity-money circulation. Especially it is beneficial for the issuers, who receive new loans secured by the bill securities, or prolong the earlier taken credits with more comfortable conditions. Availability for investors with any level of capital, easy to register, an opportunity of loan repayment at any time, the high interest or discount rate – thanks to these advantages the promissory note successfully competes with other kinds of debt securities.