As mentioned in our previous communication, the Belgian government has been discussing a draft act amending (among others) the Act of 11 July 2013 on security interests in rem on movable assets providing for the introduction of a register pledge into Belgian law.

On 4 November 2016, such amending actwas introduced in the Belgian Parliament. The amending act aims at solving certain issues which were raised by the market in respect of the reforms introduced by the Act of 11 July 2013.

Noteworthy amendments to the original provisions of the Act of 11 July 2013 will be:

  • The scheduled ultimate timing for the entry into force of the Act of 11 July 2013 is deferred with one year, namely to 1 January 2018.An earlier date may be determined by a Royal Decree. However, the latest indications are, that this will likely not be before October 2017.

  • Pledges of receivables will not be eligible for registration in the pledge register. The existing regime will continue to apply to a pledge of receivables.

  • It is clarified that only a certain number of provisions of the original act will apply to a pledge of financial collateral (such as bank accounts or financial instruments, including shares), which remains governed by the Financial Collateral Act of 15 December 2004. Consequently, pledges of financial collateral will not need to be (and cannot be) registered in the National Pledge Register for their enforceability against third parties.

  • The National Pledge Register will become accessible to everybody.

  • The original act already provided that the ownership right of a creditor holding a retention of title is not lost if the asset to which it relates subsequently becomes immovable by incorporation on the condition that the retention of title is registered in the National Pledge Register. The amendment act now specifies how to register such a retention of title.

  • It is now provided that a retention of title right will automatically follow the transfer by the seller of the receivable it secures.

  • The period during which a party can ask the court to review the manner of enforcement or the distribution of the proceeds after the enforcement process has concluded, will be shortened from one year to one month.

In its current form the amendment act provides for much needed clarifications. It will further streamline the important reforms included in the Act of 11 July 2013, providing for a more flexible framework for inventory financing, borrowing base lending and other forms of asset based financing.