The Role of Registration in Perfecting Non-Possessory Secured Transactions over Movables: What is the Extent of the Third-Party Effectiveness

Abstract

31Abstract The World Bank uses getting credit as a measurement of a country’s economic development, and a common approach to bolstering economic activity is to carry out necessary reforms on secured transactions laws.1 Amongst many legal systems, a non-possessory security interest over movable assets subject to registration is prominent.2 While the number of security instruments has drastically increased within the last century, one of the most sophisticated ones was invented more than 150 years ago: floating charge.3 Many of its features have been modified in line with the evolving needs of the market, yet its constitutive specialties stayed the same to provide sufficient flexibility for borrowers and creditors. In this paper, we analyze the role of registration and its effects, while examining the functioning of the debtor’s (borrower’s) right to dispose of encumbered assets by identifying the limits imposed on their withdrawal from the ambit of creditors’ security interests, exploring diverging implementations given the different restrictions deployed by various legislators.