The Belgian federal cabinet approved a draft act amending the Act on security interests on movable assets. The amendments should solve certain issues raised by the market in respect of the reforms introduced by the act.
First and foremost, due to additional delays in the development of the National Pledge Register, the amendment act will delay the scheduled deadline for the entry into force of the new act on security interests and movable assets by one year to 1 January 2018. The actual entry into force of the new act may occur earlier if so determined by a Royal Decree.
As a brief reminder, the main reform of the act was the introduction of a register pledge in Belgian law, abolishing the cumbersome dispossession requirement to grant a valid and enforceable pledge. While the full text of the draft act is not yet available, below we include a list of the most important amendments that have already been communicated:
- A pledge of receivables will not be eligible for registration in the pledge register. The current regime for pledges of receivables, shall continue to apply to a pledge of receivables, meaning that a valid and enforceable pledge is granted by the entry into the pledge agreement and such pledge is perfected against third parties by the notification of (or acknowledgement by) the debtor of the pledged receivable.
- It is clarified that in some cases it will be possible to grant a pledge on a movable asset that has become immovable.
- The National Pledge Register will now become accessible to everyone.
- The period during which a party can ask the court to review the enforcement procedure after such procedure has concluded, will be shortened from one year to one month.
The draft act will be sent to the Council of State for its review and will afterwards likely be introduced in Parliament.
It is expected that the amendment act will provide some much needed clarifications. It will hopefully aid to further streamline the important reforms included in the 2013 Act, providing for a more flexible framework for inventory financing, borrowing base lending and other forms of asset based financing.