The ordinance n°2017-748 dated 4 May 2017 to enter into force on 1 October 2017, completely reshapes the legal regime of the security agent, widely inspired by the security agent regime under OHADA law. Thus, French law continues its modernisation and attractiveness programme by creating a legal instrument able to compete with the security trustee involved in syndicated loans and bond issues in common law countries. The new provisions will clarify the legal regime of the security agent and reinforce creditors' protection, through:
1. a wider role for the security agent: such role is no longer limited to security on property but extends to "any security or guarantee", including personal guarantees,
2. a greater flexibility: it is no longer necessary to appoint the security agent "in the agreement creating the secured debt" , the security agent can therefore be appointed at the stage of a later syndication, or even in a separate agreement (an intercreditor agreement for example) if the creditors wish to keep the conditions of instruction to the security agent confidential,
3. a clarification of the rights and powers of the security agent, which is:
- "the holder of the security and guarantees", like the OHADA security agent, although the security and guarantees secure the debts of the creditors that appointed the security agent, and
- authorised to "exercise any action to defend the rights of the creditors" and "file any declaration of claim […] without having to show proof of any specific mandate",
4. the obligation to segregate all the "rights and assets acquired by the security agent in performing its duties" from any claim of:
- other creditors of the debtor or of the pledgor of the security (save in case of fraud, and for creditors holding or managing such assets (depositary, account bank, etc) and creditors having resale rights on these assets and rights), and
- creditors of the security agent, including if the security agent becomes insolvent, and
5. statutory replacement conditions of the security agent, including in case of breach of its obligations, endangering the interests of the creditors or the opening of insolvency proceedings against the security agent (the creditors remain free to define contractually any other case of replacement), with an automatic transfer of the rights and assets to the new security agent as of the replacement date.
Cross-border finance transactions involving French and OHADA law contracts will be significantly simplified. Commercial banks and development financial institutions will certainly make good use of this new tool.