Jersey has introduced a new security interests regime, bringing
it in line with modern international standards and making Jersey
even more attractive to lenders where an offshore vehicle is
required to give security.
Offshore vehicles regularly provide security over their
intangible movable property (e.g. bank accounts, shares, etc.) as
part of transactions varying from group corporate financing
activities for multinational companies, to finance for high net
worth individuals via personal investment companies. Difficulties
may arise, for example, due to local requirements for taking
security or a lack of information on competing interests.
Jersey's new security interests law has introduced an
online, fully automated security registration system. This will
greatly assist with recognising the existence, perfection and
priority of security; a significant benefit to any parties giving
or receiving security.
The ability to register security interests is yet another
advantage of using Jersey companies, which are fast and cost
effective to establish, and easy to operate.
SOME OF THE IMPORTANT BENEFITS OF THE NEW LAW ARE:
take "all moneys" security over present and future
similar to an English law debenture
take security over the proceeds of sale of collateral?
provided the proceeds are also intangible movable property
create third party security?
commonly created by a guarantee which is then secured
perfect the security interest?
possession or control
Possession or control; or
determines the priority of security?
of creation, but the need for possession makes it difficult to
create subordinated security
of priority specified in the law
methods of enforcement are available?
Power of sale
3. Control or possession
4. Exercise rights of grantor
5. Instruct obliged party
6. Otherwise as provided in the security agreement
JERSEY'S NEW SECURITY INTERESTS LAW WILL COME INTO FORCE IN
2 October 2013: Able to register existing
assignments of receivables on the new online security registration
2 January 2014: Fully adopted. Creation and
registration of security interests and assignments of receivables
under the new law will be possible from this date.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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