Jersey: The Security Interests (Jersey ) Law 2012


The Security Interests (Jersey) Law 2012 (the "New Law") came into force fully on 2 January 2014. The New Law updates and improves the current law relating to security interests in  intangible movable property.

Main Changes:

The main changes heralded by the New Law are:

  • It lists the types of intangible movable property to which the New Law applies.
  • It confirms that third-party security is permissible.
  • It introduces three main methods of taking a security interest:

- by control

- by possession

- by describing the collateral in a written agreement, subject to registration (see below),

and it also introduces the steps of 'attachment' and 'perfection' (see para. 4 below).

  • It confirms the ability to take security over property acquired by a debtor in the future.
  • It expands the enforcement powers and options available to secured parties.
  • It establishes a searchable, on-line, public register of security interests.
  • It includes transitional provisions preserving the status of existing Jersey security agreements entered into under previous legislation.

Scope of the New Law

The New Law enables security interests to be taken in:

  • Documentary intangibles (i.e. negotiable instruments and negotiable investment securities) situated in Jersey.
  • Investment securities (e.g. shares/units) listed on a register maintained in Jersey, or maintained by a Jersey person.
  • Investment securities held through a securities account with an intermediary where the account is maintained in Jersey.
  • A bank account maintained in Jersey.
  • Intellectual property created under Jersey law or vested in a Jersey person (but not registered IP).
  • Other security interests.
  • Trust property where the trust is governed by Jersey law.
  • Trust property that is situate in Jersey (even if the trust is not governed by Jersey law).
  • Contract rights under a Jersey law contract.
  • Contract rights against a Jersey person under a foreign law contract.
  • Interests of any person in a partnership (including customary, limited, limited liability and incorporated or separate limited partnerships).
  • Any other intangible moveable property situate in Jersey.

Security interests in these categories of property can only be created under Jersey law in accordance with the New Law.

How to Take Security

The New Law offers a variety of methods to take security, depending upon the type of collateral with which one is concerned, and every security interest must "attach" and be "perfected" (see below). Those three methods are (i) control, (ii) possession and (iii) description of collateral in writing, combined with registration.


In the case of a bank account, a secured party can take a security interest by way of control either by:

  • having the account transferred into its name (with agreement);
  • the account bank agreeing in writing to comply with the instructions of the secured party;          
  • assigning the account to the secured party in writing and giving written notice to the account bank; or
  • by simply being the account bank.

In the case of a securities account, control can be achieved by the secured party by:

  • having the account transferred into its name (with agreement);
  • the intermediary agreeing in writing to comply with the instructions of the secured party; or
  • by simply being the intermediary.

For investment securities, control is achieved by the secured party by:

  • being registered with the issuer as holder of the securities; or
  • being in possession of the certificate representing the securities.


Security can be taken in a negotiable instrument or negotiable investment security by possession of the relevant document.


Security can be created over any type of eligible collateral by using a written agreement signed by the grantor and containing a description of the collateral that is sufficient to enable it to be identified.

Attachment and Perfection

The steps described above set out how a security interest can 'attach'. However, that only creates a security interest that is enforceable against the grantor. In order to gain priority protection against third parties, the security interest must be 'perfected'. The method of perfection can depend on the kind of collateral being dealt with and in some cases perfection can be achieved by means of the same step that constitutes 'attachment':

How to 'Perfect' Security:

  • A security interest in a negotiable instrument or negotiable investment security is perfected by possession of that collateral by the secured party. As possession is also how security over such collateral will usually 'attach', no further step is required.
  • A security interest in a bank account, a securities account maintained by an intermediary, or in a certificated investment security is perfected by control of that collateral by the secured party. (Again, this means that for these types of collateral, attachment and perfection can be effected in the same step.)
  • A security interest in collateral of any type can be perfected by registration (see below).

Registration & Financing Statements:

An important change heralded by the New Law is the creation of a public, searchable, on-line register of 'financing statements'. Registering a financing statement is a means of 'perfecting' a security interest in any type of collateral. Financing statements will contain basic information as to the identity of parties, describe the relevant collateral and may indicate any subordination arrangement. Registering a copy of the security agreement itself is not intended.

Registration lasts for the period stated in the financing statement, or if none is mentioned, for 10 years, and can be renewed.

Third Party Security

Where security is granted for the obligations of a third party, practice under prior legislation was to include a limited recourse guarantee and/or covenant to pay in the security agreement. The New Law expressly provides that security may be created to secure the obligation of a third party.

After-Acquired Property

A security agreement can be expressed to extend to after-acquired property and the security interest attaches to that property upon it being acquired by the grantor without the need for any further steps to be taken.

Security for Further Advances

If the security agreement provides that the secured obligations may include obligations as to further advances, the security interest is not extinguished by repayment of a current advance. One can therefore have security for the balance on a fluctuating overdraft account. Crucially, the priority position of the security for further advances is the same as for the original advance.


The New Law provides that if certain conditions are met, a security interest in collateral that is sold or otherwise gives rise to proceeds extends to proceeds of that collateral which are of a type that falls within the scope of the New Law.

'Whole undertaking' Security

The New Law will allow a secured party to take a security interest in "all present and future intangible movable property" of the grantor. While the security interest would 'attach' to "all present and future intangible movable property" of the grantor, the secured party still needs to 'perfect' its security interests in accordance with the method(s) applicable to each relevant asset type. Given the breadth of this type of document though, the simplest method will be to register a financing statement.

Floating charges are not part of Jersey law, but the New Law provides flexibility by permitting a grantor to deal in the collateral (in the absence of a contrary direction from the secured party), without a duty to account for the proceeds or to replace collateral and without invalidating the security interest.


Enforcement Options: Under previous legislation enforcement powers expressly provided for by the statute were limited to: (i) appropriation of money; and (ii) sale of the collateral. Appropriation and sale remain the primary remedies of the secured party under the New Law but in addition to these, the New Law allows the secured party to:

  • appropriate other types of collateral or proceeds;
  • take control or possession of collateral or proceeds;
  • exercise any of the rights of the grantor in relation to the collateral or proceeds (e.g. voting rights and/or the right to receive dividends (although you can also control these prior to default, by contract)); and
  • instruct any person who has an obligation in relation to the collateral or proceeds to carry out the obligation for the benefit of the secured party (e.g. directing the actions of an intermediary who holds a securities account for the grantor).

The New Law also permits the parties to agree any other remedy to the extent that it does not conflict with the New Law. Bespoke enforcement powers can therefore be included to fit the circumstances and precise nature of the collateral. More than one enforcement step can be taken, except where they are mutually inconsistent; and taking one type of action does not preclude the exercise of other rights the secured party has under the agreement (so long as they are not in conflict with the New Law).

How to Enforce: The power of enforcement is exercisable once an event of default has occurred and written notice of this fact has been served on the grantor.

If on enforcement the secured party wants to appropriate or sell collateral, it must give the grantor 14 days prior written notice, but the grantor may agree in writing to waive its right to notice of appropriation or sale (or the notice period may be reduced). The obligation to give notice applies only where the secured party seeks to appropriate or sell collateral.

Self-Sale: The question of self-sale is less important now that secured parties can appropriate collateral other than money, but the New Law expressly states that a secured party can effect a sale by auction, public tender, private sale or another method, and that the secured party itself can also buy the collateral on enforcement.

Duties of the Secured Party: On appropriation, the secured party must "take all commercially reasonable steps to determine the fair market value" of the collateral.

In a sale, the secured party must "take all commercially reasonable steps to obtain the fair market value" of the collateral.

In either case, the secured party must otherwise act in a commercially reasonable manner.

Following appropriation or sale, the secured party must give a statement of account to the grantor and other specified interested persons.

What is the Impact of Insolvency?

The New Law provides that where the grantor is bankrupt or subject to any insolvency order or proceedings consequent upon insolvency in Jersey or elsewhere, that fact shall not affect the enforcement powers of the secured party.

A security interest can still be challenged, however, under the 'transaction at undervalue' and 'preference' regimes of relevant statutes, and a security interest that is not perfected before the grantor becomes bankrupt is void against the Viscount (or a liquidator) and the grantor's creditors.

What are the Transitional Arrangements for Existing Jersey Security?

A security interest created under prior legislation (a 'continuing security interest') will be unaffected (and the current law will continue to apply to it) unless (and to the extent) that the continuing security interest is amended. 'Amend' is defined to mean where after the New Law came into force, the parties to the continuing security agreement purported to extend the continuing security interest to collateral to which it did not previously apply.

In this case, the continuing security interest continues to be governed by the current law and the security interest over the new collateral will be governed by the New Law.

A caveat to this is that a security interest in favour of an intermediary automatically attaches to investment securities, and is perfected, if: (i) the grantor buys investment securities through the intermediary; (ii) is obliged to pay for them on or before the purchase; and (iii) the intermediary credits them to the buyer's/grantor's securities account before being paid for them. The security interest then secures the purchase price.

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.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
24 Oct 2018, Conference, St Peter Port, Guernsey

The Fund Finance Association is a non-profit industry association in the fund finance market that aims to educate members, legislators, regulators and other constituencies about the fund finance market.

13 Nov 2018, Conference, St Peter Port, Guernsey

SuperInvestor is part of the SuperReturn Series - the world's leading private equity events.

6 Dec 2018, Conference, St Peter Port, Guernsey

The definitive funds event of the year will include insights and predictions from over ten industry experts from both the Channel Islands and Europe

Similar Articles
Relevancy Powered by MondaqAI
Bedell Cristin
Hatstone Lawyers
Bedell Cristin
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Bedell Cristin
Hatstone Lawyers
Bedell Cristin
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions