What you need to know about the Moveable Transactions Act:
The Moveable Transactions (Scotland) Act 2023 (the “Act”) was passed by the Scottish Parliament in May 2023 and will make fundamental, and very positive changes to the commercial landscape in Scotland. The Act came into force on 1 April 2025.
The Act modernises the law relating to the creation of security over contractual rights and creates a new security right (the statutory pledge) that can be used to secure moveable assets.
What is changing?
The Act changes how companies create security over their Scottish assets. It will be easier to use valuable contractual rights, such as the right to receive rental income, as security for borrowings. It is also nowpossible for companies to create a new type of security called a statutory pledge over their moveable assets in Scotland, such as plant and machinery and vehicles. Previously, the only way to create security over these types of assets is to transfer possession of them to a lender or grant a floating charge.
For companies that own intellectual property (“IP”), it is also now possible to grant a statutory pledge over that IP. This will allow fixed security to be created over IP in Scotland without having to transfer title to the IP to a lender which is a significant change that will lead to more IP being used to secure borrowings.
It is also now possible to grant a statutory pledge over shares and other financial instruments from 1 April. Read our update here [insert link to JK blog] on the UK Parliamentary Order that has introduced this change. It is now possible to create fixed security over shares without the having to transfer title to the shares to a lender. This is a very welcome development to Scots law as the previous requirement to take title to the shares made security over shares in Scottish companies unattractive to many lenders.
How will this impact on corporate borrowing?
Corporate borrowers should find it easier to raise finance against, and grant security over, their moveable assets, such as contractual rights (including receivables and invoices), claims, IP, shares, vehicles and equipment. The typical security package taken by a lender will change and we expect to see statutory pledges being granted by corporate borrowers.
Key Contacts
Dawn Reoch
Partner | Board Member
Banking & Finance
Dawn has over 20 years experience acting for lenders, corporate borrowers and private equity sponsors with a diverse client base of large multinational groups.
Jonathan Heaney
Partner
Banking & Finance
Jonathan specialises in advising funders, corporates and private equity sponsors on all aspects of banking work including leveraged transactions, real estate finance and structured lending.
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