Law on Securing Charges
Parliament recently approved Law 132/2013, which amends the Law on Securing Charges (8537/1999). The amendment has removed from the law references to 'intangible properties', 'securities', 'instruments' and 'accounts'. Law 132/2013 was published in the Official Gazette (79/2013) and entered into force on May 29 2013.
From that date intangible properties, securities, instruments and accounts, as defined in the Law on Securing Charges, can no longer be granted as collateral under the law. Rather, under the amendment, securing charges can be taken only over tangible movable assets.

Law on the Payment System
Parliament has also passed the Law on the Payment System (133/2013), which also entered into force on May 29 2013.

Creation of financial collateral
Article 25 of Law 133/2013 indicates that financial collateral is created in pursuance to a written agreement (paper or electronic), and no other formalities are required.
The financial instruments provided as financial collateral may be:

• transferred to the possession of the collateral taker; or
• credited to a special account held in a register in the name of the collateral giver, collateral taker or a third party acting as depositor.

The same applies to cash as financial collateral, possession of which is transferred to the collateral taker or a special account, or is held, transferred or subject to any measure so as to be in the possession or under the control of the collateral taker or a person acting on the collateral taker's behalf. The collateral taker notifies the debtor of the performed transfer by acknowledging the claim on the cash or the debtor's obligation to recognise explicitly the existence of the financial collateral agreement.

Scope of application
Law 133/2013 introduces financial collateral as a new form of collateral arrangement (alongside pledges and securing charges). For the purposes of this law, financial collateral comprises cash and financial instruments.

Definitions
The new law defines 'cash' as "money credited to an account in any currency, or similar claims for the repayment of money, such as monetary deposits".

'Financial instruments' are defined as:
"shares of joint stock companies, either foreign or local, and other securities equivalent to shares in joint stock companies, bonds and other forms of debt instruments if these are negotiable on the capital markets and any other securities which are normally dealt in and which give the right to acquire any such shares, bonds or other securities by subscription, purchase or exchange or which give rise to a cash settlement (excluding instruments of payment), including units in collective investment undertakings, money market instruments, precious metals credited in an account and claims relating to or rights in or in respect of any of the foregoing."

Enforcement
The collateral taker has the right to enforce the financial collateral without prior notice and without intervention of the court or another public authority, in accordance with the agreed terms and conditions.
In case of financial instruments, enforcement takes place by sale or appropriation and by offsetting their value against the relevant financial obligations; for cash, enforcement takes place by offsetting the amount against the relevant financial obligations.

For further information please contact Alketa Uruci or Erlind Kodhelaj at Boga & Associates by telephone (+355 4225 1050), fax (+355 4225 1055) or email (auruci@bogalaw.com or ekodhelaj@bogalaw.com).

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