A New Law for Registering Pledges

This article was originally published in the schoenherr roadmap`10 - if you would like to receive a complimentary copy of this publication, please visit: http://www.schoenherr.eu/roadmap.

In 2009 an extensive amendment to the Act on the Registered Pledge was introduced, removing many restrictions on the registered pledge system. Most of the changes are welcomed as they will lead to more widespread use of the registered pledge system.

Broader application

A fundamental change concerns the extension of entities for which a registered pledge may be established. So far, registered pledges have been used to secure, among others, the receivable debts of the State Treasury and domestic and foreign banks. As a result of the amendment, it will be possible to establish a registered pledge on behalf of each entity, including natural persons not engaged in business activities and foreign legal entities which are non-credit institutions.