Moveable Transactions - Two weeks to launch

With less than 2 weeks remaining until the provisions of the Moveable Transactions (Scotland) Act 2023 go live, it is an interesting time for funders looking to do business in Scotland. Are you limbering up for the race to get the first assignation or statutory pledge registered?

Have your operations and credit teams locked down their processes and documentation to take advantage of the new legislation and are you ready to wax lyrical to clients and customers in terms of what you can offer them?

For those wanting to get out of the blocks quickly, there are a few points that you might not yet have considered and which might require changes to your chosen strategy:

• Application – which transactions will fit with the new legislation and are funders aware that shares in Scottish companies (for the moment), aircraft and vessels are excluded but intellectual property is included?
• Timing –will funders want to open up existing documentation as soon as possible or will it be more appropriate to wait until an appropriate point in the life cycle?
• Transaction Risk – will funders attempt to deal with documentation and registrations themselves or will it be appropriate to seek support in the short to medium term and will funders understand what is required to manage statutory pledges moving forward in order to manage the ongoing risks around consent and acquiescence?
• Information Requests – will funders have processes in place to deal with requests in relation to assignations so that responses can be provided within the relevant statutory period (and what fees funders may charge)?
• Ranking – are funders aware of how this will work where clients and customers have granted more than 1 assignation or statutory pledge over the same assets. Will a ranking agreement help and will it require to be registered?
• Releases – do funders have the administrative function in place to deal with releases? It might feel unusual to consider the release of security before it can even be granted, but the validity of the statutory pledge is impacted by whether the security holder is approached to release the pledged assets. If the assets are likely to churn quickly, regular requests for releases could result in an administrative headache.

If you have not yet considered some or all of these questions, there is still time to get the appropriate support. Please contact one of us or your usual TLT contact and we can discuss how to provide you with relevant and practical support, tailored to your business’s requirements.

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at March 2025. Specific advice should be sought for specific cases. For more information see our terms & conditions.