The new Security Interests (Jersey) Law 2012 which came into force on 2 January 2014 provides a new regime for the creation and registration of security interests over shares and other intangible movable property situate in Jersey.
Set out below is a summary of the key advantages to creditors of the new law:
- Enhanced enforcement powers. Secured parties are afforded much wider powers of enforcement including appropriation of the collateral and step-in rights.
- 14 day enforcement grace period addressed. There is no delay to enforcement as parties may now contract out of the 14 day statutory notice period.
- Register of security. A searchable register of security interests is now available.
- Greater flexibility in creation of security. Simple method of creation of security by attachment (description) and registration introduced to complement the more traditional methods e.g. by way of having 'control' of shares or a bank account.
- Second ranking security simplified. Advantages for mezzanine finance deals when taking second ranking security.
- Catch all security possible. Ability to take security over all present and future intangible movable property of the grantor.
- Third party security. Third party security expressly acknowledged which will simplify documentation and negate the need for limited recourse guarantees in security agreements.
- Debenture style agreements are possible. It is not necessary to have a separate agreement for each asset class.
Security granted under the Security Interests (Jersey) Law 1983 remains valid and retains its priority position except in certain circumstances.
Please note that this briefing is only intended to provide a very general overview of the matters to which it relates. It is not intended as legal advice and should not be relied on as such.