The proposed regulation on the law applicable to so-called “third party effects” – essentially, regarding the priority between competing claims – has lost another friend. We reported a few weeks ago that the UK would not adopt it (the UK has an opt-out for things like this). The draft regulation had proposed a default position that where you have two competing assignments, the law of the assignor’s habitual residence should govern priority, because that is probably where the main insolvency proceedings would be, subject to carve-outs for bank deposits, claims derived from financial instruments, and securitisations (where parties can choose the law of either the assignor or the assigned claim), and assignments of claims relating to trusts. The May 2018 CLLS paper called this “misconceived”, and argued any default position should be determined by the law of the claim. An ECB “opinion” on 18th July agrees and wants a carve out for claims derived from bank loans (these often being given as collateral to central banks).