A landmark reform in Scottish financial law is set to take effect on April 1, 2025, with the introduction of the Moveable Transactions (Scotland) Act 2023. This long-anticipated legislation is expected to transform how businesses and lenders create security over moveable assets, bringing Scotland in line with other major jurisdictions.
What the New Law Changes
Historically, Scotland’s legal framework for taking security over moveable assets—such as receivables, intellectual property, and inventory—has been seen as outdated compared to England and other international markets. The new Act introduces two key mechanisms that will modernize the system:
- Statutory Pledge – Allows businesses and lenders to take fixed security over a wide range of moveable assets without transferring possession.
- Assignation of Claims – Streamlines the process of transferring rights to payment, including debts and receivables, by introducing a new public register.
These changes are designed to boost access to finance, simplify transactions, and provide greater certainty for both borrowers and lenders.
Implications for Businesses and Lenders
For companies operating in Scotland, the Act is expected to unlock new funding opportunities by making it easier to secure loans against moveable assets. Lenders, in turn, will gain enhanced protection and enforcement rights, reducing risk and potentially lowering the cost of credit.
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The Role of the New Registers
The legislation establishes two new public registers, which will be crucial for implementing the reforms:
- The Register of Statutory Pledges, allowing businesses to register security interests over moveable assets.
- The Register of Assignations, providing transparency in the transfer of claims, particularly for invoice financing and trade receivables.
These registers, maintained by the Registers of Scotland, are intended to increase visibility and reduce disputes over priority claims.
Key Considerations Before April 2025
With the Act set to take effect in less than two months, businesses and financial institutions should take the following steps:
- Review existing security arrangements to assess how the new regime may affect current lending structures.
- Update contractual agreements to reflect the changes in assignation and fixed security rules.
- Engage legal and financial advisors to ensure compliance with the new registration requirements.
Looking Ahead
The Moveable Transactions (Scotland) Act 2023 represents a significant shift in Scottish commercial law. By aligning the security framework more closely with global standards, the legislation is expected to enhance investment confidence and improve access to credit for businesses across Scotland.
