New Regulation On Financial Collateral Law

The Financial Collateral Arrangements are newly regulated by a separate act which has taken effect as of 1 January 2011. The main changes to the Act include extension of financial collaterals and extension of the range of persons allowed to enter into financial collateral arrangements.

Background

The Czech legislators had to implement the Amending Directive (Directive 2009/44/EC of the European Parliament and of the Council of 6 May 2009) which amends the Financial Collateral Directive (Directive 2002/47/EC of the European Parliament and of the Council of 6 June 2002 on financial collateral arrangements) and decided to review the existing legal regulation.

As a result, the new Act on Financial Collaterals (Act No. 408/2010 Coll., on Financial Collaterals) (the "Act") was adopted and replaced the rules on financial collateral originally contained in the Czech Commercial Code (Act No. 513/1991 Coll., the Commercial Code, as amended).