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In previous IFLR issues, this series of bulletins has covered
parallel debt and pledge administrator as concepts allowing to
secure a multi-facility syndicated structure with Polish
lawgoverned security interests. As previously noted, the pledge
administrator is available in relation to registered pledges, which
may be established over rights and property other than real
property. It is, therefore, time to see whether a relevant concept
is available in respect of the only security interest that may be
established over real property – a mortgage.
As of February 2011, the answer to the question has become
positive. Amendments to the Act of July 6 1982 on the land and
mortgage registry books and mortgage have brought revolution to the
regime by permitting to secure with a single mortgage: more than
one claim of an individual creditor; and several claims of several
creditors.
Originally, the mortgage was based on the one
claim–one security interest principle, which prevented
any sophisticated structures from being implemented.
Securing of several claims of several creditors with a single
mortgage is, nevertheless, subject to a few conditions. Firstly,
the claims to be secured by the mortgage must serve the purpose of
"financing of the same undertaking (venture)". The
condition has been vastly criticised in legal writings as vague and
imposing unnecessary limitations on the possible use of the
structure. For example, while it appears obvious that financing of
construction of an office building would meet the requirement, the
same could not be equally easily concluded in respect of financing
of an acquisition of shares of a company or refinancing of an
existing indebtedness. Fortunately, authors of the new legislation
followed by scholars and practitioners have opted in favour of an
extensive construction of the condition allowing it to apply to
financing of any "common goal".
Secondly, a mortgage administrator has to be appointed by all
creditors whose claims are to be secured; the appointment is
effected by way of an agreement between the creditors and the
administrator. The administrator may be appointed from among the
creditors or (unlike in the case of a pledge administrator) it may
be a third party. The administrator exercises the rights and
obligations of a mortgagee on its own behalf, but for the account
of the secured creditors.
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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The Risk and Regulation Monthly provides a summary of the key International, European and UK regulatory developments and pertinent regulatory activity affecting the Financial Services industry.
Existing funds which no longer invest after July 22, 2013 are not required to comply with the provisions of the KAGB, even if the manager of such funds also manages funds which still make investments.
The purpose of this investment memorandum is to provide an overview of the investment vehicles (i.e. regulated, lightly regulated and unregulated) that Luxembourg offers to (foreign) entrepreneurs and managers.
The FSA has been in discussions with the banks with regard to them providing appropriate redress for affected customers in relation to the mis-selling of payment protection insurance.
The Court of Justice of the European Union has ruled that VAT on investment management fees paid by the trustees of a UK defined benefit pension scheme is irrecoverable under a VAT exemption for special investment contained in two EU Directives.
The draft legislation transposing the European Union’s Alternative Investment Fund Managers Directive into Luxembourg law was submitted to the grand duchy’s Chamber of Deputies by finance minister Luc Frieden on August 24.
Directive 2011/61/EU on Alternative Investment Fund Managers comes into force on 22 July 2013, and aims to provide common requirements across all EU States for the management or sale of Alternative Investment Funds by Alternative Investment Fund Managers within the EU.
A summary of the most recent financial regulatory developments.
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