The Moveable Transactions (Scotland) Act 2023 (the “Act”)

The Act, which came into force on 1 April 2025, has provided additional methods to create and enforce certain security interests in Scotland.

Scots law has historically differed from English law in terms of assets that can be secured and how that security is created. Before the introduction of the Moveable Transactions (Scotland) Act 2023, taking fixed security over moveable assets, such as contractual rights and shares, was generally done through assignation in security or share pledges, both of which required specific perfection formalities to provide effective fixed security.

Unlike English law, Scots law does not recognise equitable rights. This meant that if the necessary steps to perfect a security interest were not taken (which could be the case with, as an example, share pledges) no fixed security was created. Consequently, security packages and enforcement options in Scotland could be more restricted, and funders often relied on floating charges if these were able to be taken.

Some key aspects of the new Act include:

Assignation:

• it updates the law relating to assignation and allows assignation of future claims (subject to rules that apply on insolvency).
• it creates the Register of Assignations which provides an alternative to intimation to create the security.
• it modernises intimation rules, including allowing electronic intimation, should parties wish to intimate.

Statutory Pledge:

• it introduces the “Statutory Pledge”, a form of fixed security that can be granted over corporeal moveable property and certain incorporeal assets, including shares.
• these can be granted by companies, LLPs, partnerships, trustees (with restrictions), and individuals in certain circumstances.
• they are created by registration in the new Register of statutory pledges.
• they can cover future property, provided it is acquired before insolvency.

The modernisation of the law of assignation and the creation of the Statutory Pledge under the Moveable Transactions (Scotland) Act 2023 mark a significant advancement in Scots law. It resolves historic challenges in securing moveable assets with fixed security which should hopefully be of benefit to both funders and borrowers, particularly in cross-border transactions involving Scottish assets and obligors.

While the Act aligns the situation in Scotland more closely with that in England and Wales, it remains the case that fixed charge or LPA receivers cannot be appointed in Scotland. Assignations will continue to be enforced by security holders, and the procedures for enforcing statutory pledges must follow the provisions set out in the Act.

In practice, although security holders appear to gain additional rights on paper, enforcing those rights may still present challenges and present certain risks, since appointing a receiver to protect the security holder is not an option. Consequently, security holders might still be hesitant to pursue direct enforcement and instead rely on an insolvency appointment, where feasible.

How we can help

If you need support with any of the issues raised in this article, please contact Gillian Anderson, who will be able to assist.