Response to Consultation: European Commission Review of the Financial Collateral Arrangements Directive: 5 May 2021

In February 2021, the European Commission published a consultation to gather views on the functioning of Directive 2002/47/EC on financial collateral (the “Financial Collateral Directive” or the “FCD”).  The FCD makes provision for the enforceability and non-registration of certain financial collateral arrangements.  In particular, section 2 of the Consultation asks whether the concepts of “possession” and “‘control” in the FCD are sufficiently clear or might need further clarification”.

The FMLC has submitted a response drawing attention to previous FMLC papers on “possession” and “control”, written in 2010 and 2012, which highlight the serious issues of legal uncertainty and material difficulties arising from the definitions of “possession” and “control”.

Available as: PDF.