Written by Samir Younes 

 

As we enter a new year, there has been a key update in the implementation of the Moveable Transactions (Scotland) Act 2023 (“MT(S)A”). Scottish Ministers have passed regulations which will bring the remaining provisions of the MT(S)A into force on 1 April 2025. 

The MT(S)A will significantly update and reform the landscape for financing moveable property in Scotland. To provide a brief overview of the MT(S)A –

  1. The MT(S)A creates a new form of security (a ‘Statutory Pledge’) whereby security can be granted over moveable property without the requirement of possession to the party taking the benefit of the security.  
  2. The MT(S)A provides for the creation of two new registers, the Register of Assignations, and the Registers of Statutory Pledges (together the “Registers”) which will simplify and remove the practical difficulties surrounding the existing Scots law of pledges and assignations currently. 
  3. The new creation of the Registers will operate alongside, and as an adjunct to, the current means of creating pledges and assignations. Therefore, parties will have a freedom of choice and will enable businesses to leverage their moveable property to obtain finance in ways not seen before. 

Since the MT(S)A received royal assent on 13 June 2023, several consultations have been launched as regards to application of the MT(S)A, for example, registration fees. Registers of Scotland, who will be operating the new Registers, are in the process of creating the electronic platform and software necessary to facilitate the Registers operation.  In addition to the commencement regulations, the Scottish Ministers have laid down further regulations which discuss the rules of procedure for the new Registers. This year is definitely an important one for both lenders and borrowers! 

Looking towards the next few months, both lenders and borrowers should be considering what impact and opportunities that the MT(S)A will have ahead of commencement on 1 April 2025. For any advice on the application of the MT(S)A and how this could affect your business generally, please do get in touch with us.