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Your starting point would be well, since {{t|Ireland}} is still a member of the [[EU]] and, as far as north-Atlantic states go, an enthusiastic one at that, and as such is obliged to implement the [[Financial Collateral Directive]] into domestic law. Since that happy directive has done away with the [[Tedious|tiresome]] yet strangely exhilarating business of having to [[Registration of charges|register charges]] with the domestic agency responsible for monitoring those things things in your member state, the answer, on a commonsense application of principles of European Law, ought to be “no”. | Your starting point would be well, since {{t|Ireland}} is still a member of the [[EU]] and, as far as north-Atlantic states go, an enthusiastic one at that, and as such is obliged to implement the [[Financial Collateral Directive]] into domestic law. Since that happy directive has done away with the [[Tedious|tiresome]] yet strangely exhilarating business of having to [[Registration of charges|register charges]] with the domestic agency responsible for monitoring those things things in your member state, the answer, on a commonsense application of principles of European Law, ought to be “no”. | ||
And, indeed the Irish ''[[Financial Collateral Arrangement Regulations]]'', as incorporated into the Irish [[Companies Act 2014 (Ireland)|Companies Act 2014]] provide that certain types of charges do not actually count as “[[charge]]s” for the purposes of Section [http://www.irishstatutebook.ie/eli/2014/act/38/section/408/enacted/en/html 408(1)] of the Irish [[Companies Act 2014 (Ireland)|Companies Act 2014]] and therefore do not need to be registered under Section [http://www.irishstatutebook.ie/eli/2014/act/38/section/409/enacted/en/html 409]. | And, indeed the Irish ''[[Financial Collateral Arrangement Regulations]]'', as incorporated into Part 7 of the Irish [[Companies Act 2014 (Ireland)|Companies Act 2014]]<ref>http://www.irishstatutebook.ie/eli/2014/act/38/enacted/en/print#part7</ref> provide that certain types of charges do not actually count as “[[charge]]s” for the purposes of Section [http://www.irishstatutebook.ie/eli/2014/act/38/section/408/enacted/en/html 408(1)] of the Irish [[Companies Act 2014 (Ireland)|Companies Act 2014]] and therefore do not need to be registered under Section [http://www.irishstatutebook.ie/eli/2014/act/38/section/409/enacted/en/html 409]. | ||
These include [[mortgage]]s and [[charge]]s created over an “interest” in: | These include [[mortgage]]s and [[charge]]s created over an “interest” in the following assets (let’s call them '''FCR-eligible assets'''): | ||
:(a) [[cash]];<ref>I know, I know. You can’t take [[security]] over [[cash]]. But if you try, then even if you could, you couldn’t, unless you registered your attempt. But since you can’t ... I’ll get my coat.</ref> | :(a) [[cash]];<ref>I know, I know. You can’t take [[security]] over [[cash]]. But if you try, then even if you could, you couldn’t, unless you registered your attempt. But since you can’t ... I’ll get my coat.</ref> | ||
:(b) [[deposit]]s and [[money]] credited to bank accounts; | :(b) [[deposit]]s and [[money]] credited to bank accounts; | ||
:(c) [[share]]s, [[bond]]s or [[Debt securities|debt instruments]]; | :(c) [[share]]s, [[bond]]s or [[Debt securities|debt instruments]]; | ||
:(d) [[money market fund]]s or [[collective investment scheme]] units; or | :(d) [[money market fund]]s or [[collective investment scheme]] units; or | ||
:(e) claims and rights (such as [[dividend]]s or [[interest]]) over any of the above. | :(e) claims and rights (such as [[dividend]]s or [[interest]]) over any of the above.<ref>[http://www.irishstatutebook.ie/eli/2014/act/38/enacted/en/print.html Irish Companies Act Section 408(1)]. </ref> | ||
''But''. | ''But''. | ||
That isn’t necessarily how the [[Central Bank of Ireland]] sees it. Matheson warns<ref>[https://www.matheson.com/images/uploads/publications/Companies_Act_2014_Registration_and_Priority_of_Charges_June_2015.doc.pdf “The Companies Act 2014: Registration and Priority of Charges”]</ref> that the registrar tends to take a conservative approach to excluding charges from the registration requirement on account of the ''[[Financial Collateral Arrangement Regulations]]'' — by which it means if you have a general charging clause that mainly concerns financial collateral, but includes non-[[Financial Collateral Regulations|FCR]]-eligible forms of [[security]] as well you still have to register the whole thing — so you may still find local counsel for Irish [[espievie]]s insisting that you register charges with the CBI, notwithstanding the Emerald Isle’s continued membership of the [[European Union]].<ref>“... Charges over all categories of assets are now registerable save for certain specific exclusions (including, for example, a charge created over an interest in cash or in shares in an Irish company). Thus, particulars of every charge created by a company over any property need to be delivered to the CRO, save for charges over non-registrable assets.” — [https://www.lawsociety.ie/Solicitors/Practising/Practice-Notes/Priority-and-registration-of-charges/#.XdusMtWwmiM Irish Law Society bulletin].</ref> | That isn’t necessarily how the [[Central Bank of Ireland]] sees it. Matheson warns<ref>[https://www.matheson.com/images/uploads/publications/Companies_Act_2014_Registration_and_Priority_of_Charges_June_2015.doc.pdf “The Companies Act 2014: Registration and Priority of Charges”]</ref> that the registrar tends to take a conservative approach to excluding charges from the registration requirement on account of the ''[[Financial Collateral Arrangement Regulations]]'' — by which it means if you have a general charging clause that mainly concerns financial collateral, but includes non-[[Financial Collateral Regulations|FCR]]-eligible forms of [[security]] as well you still have to register the whole thing — so you may still find local counsel for Irish [[espievie]]s insisting that you register charges with the CBI, notwithstanding the Emerald Isle’s continued membership of the [[European Union]].<ref>“... Charges over all categories of assets are now registerable save for certain specific exclusions (including, for example, a charge created over an interest in cash or in shares in an Irish company). Thus, particulars of every charge created by a company over any property need to be delivered to the CRO, save for charges over non-registrable assets.” — [https://www.lawsociety.ie/Solicitors/Practising/Practice-Notes/Priority-and-registration-of-charges/#.XdusMtWwmiM Irish Law Society bulletin].</ref> | ||
In fairness, Section 408(3)<ref>http://www.irishstatutebook.ie/eli/2014/act/38/enacted/en/print#sec408 </ref> goes on to say a [[charge]] created over ''both'' the excluded [[FCR]]-eligible assets and other, ordinary property will “other than to the extent to which it is created over an interest in [[[FCR]]-eligible assets]” be regarded as a registrable [[charge]]. | |||
Here is where the lawyer’s yen for over-particularity can be a self-snooker. A [[prime broker]] or a [[custodian]] will like to take a general charge over not just securities, but the fund’s claim against the [[custodian]] in whose accounts they sit (even though that will usually be itself), and all the fund’s rights against its counterparties under market transactions (even though they will (largely) be itself). It is a moot point whether claims under a swap transaction ''referencing'' a bond or share count as “claims and rights over any of the above” so the [[path of least resistance]], paved with good intentions though it is, is just to register the charge and be done with it. | Here is where the lawyer’s yen for over-particularity can be a self-snooker. A [[prime broker]] or a [[custodian]] will like to take a general charge over not just securities, but the fund’s claim against the [[custodian]] in whose accounts they sit (even though that will usually be itself), and all the fund’s rights against its counterparties under market transactions (even though they will (largely) be itself). It is a moot point whether claims under a swap transaction ''referencing'' a bond or share count as “claims and rights over any of the above” so the [[path of least resistance]], paved with good intentions though it is, is just to register the charge and be done with it. | ||
That said, Section 408(3) seems, to our reading, to acknowledge that an unregistered charge will still be effective to the extent it covers FCR-eligible assets, even if it won’t work for other assets. Since the other assets part is basically thrown in for good measure, one might be inclined to take a bit of a view. Not that we would recommend anything quite so cavalier, of course. | |||
====The JC says==== | ====The JC says==== | ||
But for what it is worth, Central Bank of Ireland, the [[JC]] doesn’t think such a literal reading of the [[Financial Collateral Directive]] is the most productive use of your moral authority or the industry’s time, at any rate where dedicated [[investment fund]]s, whose only ''raison d’etre'' is to invest in financial assets and their derivatives, are concerned.<br> | But for what it is worth, Central Bank of Ireland, the [[JC]] doesn’t think such a literal reading of the [[Financial Collateral Directive]] is the most productive use of your moral authority or the industry’s time, at any rate where dedicated [[investment fund]]s, whose only ''raison d’etre'' is to invest in financial assets and their derivatives, are concerned.<br> | ||