The Moveable Transactions (Scotland) Act 2023 will make fundamental and positive changes to commercial transactions in Scotland.
We can help you understand and make the most of these positive changes.
This new legislation will make it easier to create fixed security over contractual rights and moveable assets in Scotland. This Hub provides detail on the technical changes, as well as sharing the new opportunities and benefits the Moveable Transactions (Scotland) Act 2023 (“MTSA”) will bring.
Why does the law need to change?
The current law is outdated and not fit for today’s commercial landscape. The MTSA brings much needed change to benefit both lenders and borrowers in relation to structuring funding and security arrangements in Scotland.
What will change when the MTSA comes into force?
The MTSA makes two key changes to the current law. It:
- modernises the law in relation to assignations, making it much easier to create security over contractual rights; and
- creates a new fixed security right known as the “statutory pledge” that can be granted over certain moveable property.
Changes to Assignations
In relation to assignations of contractual rights, the MTSA addresses three main issues with the existing law:
INTIMATION
Under the current law, to create security over contractual rights, notice of the assignation of those rights (an intimation) must be given to the debtor or debtors. It is not clear whether electronic intimation is sufficient or whether notice must be given in person or by post.
The MTSA:
- expressly permits notice to be given by email or through a website or portal; and
- introduces an alternative to intimation; if the assignation document is registered in a new Register of Assignations then intimation is not required.
These changes will be particularly helpful in relation to student accommodation financing, real estate finance involving multiple tenants, invoice finance with numerous debtors and fund finance involving a number of limited partners. Similarly, the MTSA will have a significant impact on those securitisation transactions which do not involve interests in real property.
CONTROL
Under the existing law, meaningful control of the assigned rights must transfer to the assignee to create a valid assignation. This often presents significant commercial challenges, for both borrowers and lenders. This is particularly obvious where rental income is assigned in security to lenders or general partners assign the right to call uncalled commitments from limited partners: often neither party wants the lender to actually receive these rental payments or exercise the right to call prior to an enforcement.
The MTSA removes these issues completely by expressly providing that rights can be validly assigned even where the lender has instructed the debtor to continue to pay the borrower/ assignor.
FUTURE RIGHTS
At present it is not clear whether future rights can be assigned under Scots law. The MTSA expressly permits the assignation of claims not yet held by the assignor and future rights not yet in existence.
This will be relevant in several circumstances. For example, in student accommodation financings it will be possible to create security over the rental income owed by tenants on day one and all future tenants. On fund finance transactions, it will mean security can be granted over the commitments of all limited partners on day one, avoiding the need for supplemental assignations where new limited partners are admitted after first close. For securitisations, it will facilitate assignations over existing and future receivables at the outset, circumventing the need for supplementary trusts and assignations in relation to future receivables.
Statutory Pledge - a new fixed security right
Currently, the only way to create fixed security over physical moveable property in Scotland is by way of a pledge which requires physical or symbolic delivery of the asset. It is rarely practical for a pledgor to relinquish possession of assets such as vehicles or machinery that it uses in its business.
The MTSA creates a completely new, non-possessory, fixed security right called the statutory pledge which can be granted over certain moveable assets. Perfection is by registration of the pledge document in a new Register of Statutory Pledges without the need for delivery. Unlike floating charges, the new statutory pledge will be available to partnerships and sole traders as well as companies. It will be possible to take fixed security over classes of property, for example a fleet of vehicles and casks of whisky. However, care will be needed when structuring the security because under the Act an entire pledge can be extinguished if a lender acquiesces to the release of part of the pledged property without giving specific written consent.
The new statutory pledge may also be created over certain non-physical (incorporeal) moveable property including shares, other financial instruments and intellectual property. This is a very welcome change with regard to shares because under the current law, title to the shares must be transferred to the lender to create a fixed security right under Scots law. Removing the requirement to transfer title will make taking fixed security over shares and financial instruments much more appealing to lenders and will remove the particular PSC and NSIA issues caused currently by Scottish shares pledges.
What are the benefits of these changes?
The MTSA is a very welcome modernisation of Scots law that will make it much easier to create fixed security over contractual rights and moveable assets in Scotland. We consider the changes introduced by the Act will have a positive commercial impact by enabling borrowers to leverage their key assets more easily in line with other jurisdictions.
How can we help?
As you’ll see from our Hub, the MTSA has wide reaching implications.
The Moveable Transactions Group brings together Burness Paull experts in the following sectors; banking and finance, funds, restructuring and insolvency, construction, private client, intellectual property, real estate and corporate finance to help you navigate these significant changes.
Our sector-specific guides will give you an insight into how the MTSA will affect your business.
The MTSA affects the following market sectors:
- Asset finance, receivables finance and invoice finance
- Corporate borrowing
- Oil & Gas
- Fund Finance
- Private clients
- Construction and Projects
- Restructuring and Insolvency
- Corporate
- Real Estate Finance
Our team of experts is here to help. Get in touch with our team today or subscribe here to stay up to date with Moveable Transactions developments.
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The Moveable Transactions Act: Essentials for asset, receivables & invoice finance.
MTA: Construction Industry
The Moveable Transactions Act: Essentials for the construction industry.
MTA: Corporate Borrowing
The Moveable Transactions Act: Essentials for corporate borrowing.
MTA: Fund Financing
The Moveable Transactions Act: Essentials for fund financing.
MTA: Oil & Gas Sector
The Moveable Transactions Act: Essentials for oil & gas sector.
MTA: Private Clients
The Moveable Transactions Act: Essentials for private clients.
MTA: Real Estate Finance (Development)
The Moveable Transactions Act: Essentials for real estate finance development.
MTA: Real Estate Finance (Investment)
The Moveable Transactions Act: Essentials for real estate finance investment.
MTA: Restructuring & Insolvency
The Moveable Transactions Act: Essentials for restructuring & insolvency.
MTA: Securitisation
The Moveable Transactions Act: Essentials for securitisation.
MTA: Student Accommodation
The Moveable Transactions Act: Essentials for student accommodation.
MTSA Insights

Moveable Transactions (Scotland) Act 2023 - A(s)sign of opportunities to come!
The Moveable Transactions (Scotland) Act 2023 comes into force on 1 April 2025, changing how security is taken over moveable assets in Scotland – bringing new opportunities for lenders and borrowers.

Moveable Transactions (Scotland) Act 2023: Some very welcome reform for fund finance transactions
The Moveable Transactions (Scotland) Act 2023 (the “MT(S)A”) comes into force on 1 April 2025 and changes how fixed security over moveable property is taken in Scotland.

Moveable Transactions (Scotland) Act 2023: The new statutory pledge
The Moveable Transactions (Scotland) Act 2023 (the “MTSA”) comes into force on 1 April 2025 and changes how security is taken over moveable assets in Scotland.
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