Financial Collateral Directive: Difference between revisions

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 The {{tag|Financial Collateral Directive}} ({{eudirective|2002|47|EC}}) is a well-intended piece of {{tag|EU Regulation}} that, by common consent, didn't quite achieve what it set out to, which was to introduce "a Community framework to reduce credit exposure in financial {{tag|collateral}} arrangements. These common rules contribute to the effectiveness and integration of European financial markets, reducing credit losses and thereby stimulating cross-border transactions and competitiveness."
+===Overview===
 The directive was designed to simplify and universalise the process of taking security in financial contracts across the EU – for one thing it would mean that any formal registration or perfection requirements which otherwise would be required (registering the security interest with the registrar of companies for example) do not apply.
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 While this is no doubt intended to help, given that, in the final analysis, the person likely to challenge that analysis would be a competing creditor, and the person who would be arbitrating on it would be a liquidqator, if an arrangement were not formally within the definition, then the fact that the parties agreed it was intended to be probably wouldn’t.
-===[[Appropriation]]===
-As well as disapplying certain formalities to effective security interest, the [[FCD]] creates a remedy of “[[appropriation]]”, a novel remedy certainly as regards shares, Which was previously unknown to English law:
-:''Where a legal or equitable mortgage is the [[security interest]] created or arising under a [[security financial collateral arrangement]] on terms that include a power for the [[collateral-taker]] to appropriate the collateral, the [[collateral-taker]] may exercise that power in accordance with the terms of the [[security financial collateral arrangement]], without any order for foreclosure from the courts.''
 ===What it does===
 The [[FCD]] divides [[financial collateral arrangement|financial collateral arrangements]] into two mutually exclusive categories:
 *'''[[Title transfer financial collateral arrangement]]s''': Under a [[TTCA]] a [[collateral-provider]] transfers full ownership of the [[financial collateral]] to the [[collateral-taker]] on terms that It will transfer back [[equivalent]] assetswhen the obligations are discharged; and
 *'''[[Security financial collateral arrangement]]s''': Under an [[SFCA]] the collateral provider provides [[financial collateral]] by way of security but retains full ownership of the financial collateral remains with the collateral-provider.
+===[[Appropriation]]===
+As well as disapplying certain formalities to effective security interest, the [[FCD]] creates a remedy of “[[appropriation]]”, a novel remedy certainly as regards shares, Which was previously unknown to English law:
+:''Where a legal or equitable mortgage is the [[security interest]] created or arising under a [[security financial collateral arrangement]] on terms that include a power for the [[collateral-taker]] to appropriate the collateral, the [[collateral-taker]] may exercise that power in accordance with the terms of the [[security financial collateral arrangement]], without any order for foreclosure from the courts.''
 ===[[Title transfer collateral arrangement]]s===