REDUCING CREDITOR RISKS: Security registrar in AIFC

We are delving deeper into the practical facets of implementing AIFC law. These topics consistently receive a positive response, particularly from our legal community and consultants. We extend our heartfelt appreciation for your support, which serves as a constant source of motivation to bring you valuable and essential insights.

Today, we will explore how creditors can effectively reduce the risks associated with non-repayment.

In AIFC law the institution of a pledge is acknowledged as a distinct security obligation, and its execution necessitates the registration of the pledge itself (security agreement) with the AIFC. These security agreements serve as an added layer of protection for creditors and stand as a guarantee of the borrower’s commitment, as pledging their assets involves the potential irreversible loss of those assets.

The registration of securities is overseen by the AIFC Security Registrar, who maintains a special register within the AIFC, containing information about pledged assets. Notably, a wide range of assets can be used as pledge, including shares and stakes in companies, securities, bank accounts, property rights, and more.
 
The AIFC Security Registrar can also provide information about the pledged property. This information is essential for ensuring the legal integrity of transactions, such as purchases, loan acquisitions, M&As. Information pertaining to registered encumbrances can be obtained within 3 working days.