Ordinance No. 2021-1192 of 15 September 2021 reforming the law of securities has been published (ordinance issued by the government on the basis of the law of 22 May 2019, known as the "PACTE law").
Its provisions will come into force on 1 January 2022 (except for certain provisions requiring implementing regulations, which will come into force later, but no later than 1 January 2023).
This reform aims to modernise and unify the system of securities, in particular by bringing together the rules of securities law, which are dispersed in various codes and laws, within the Civil Code. It also aims to strengthen the effectiveness of the law of securities, while ensuring a balance between the interests of creditors and those of debtors and guarantors.
Numerous securities are reformed: surety bonds, movable privileges, common law pledges, pledges of receivables, retention of title, pledges of securities accounts, guarantees on businesses, etc. The ordinance also repeals certain special securities that have become obsolete or outdated, as provided for in the Commercial Code, such as commercial pledges, stock pledges and oil warrants (the common law pledge regime will apply).
The most significant changes are to the guarantee regime, in particular
the possibility for the guarantor to raise against the creditor exceptions that are purely personal to the debtor,
modification of the penalty for a disproportionate guarantee, by removing the total forfeiture and replacing it by the reduction of the guarantee,
the possibility of concluding a guarantee by electronic means,
unification of the system of handwritten endorsement within the Civil Code by requiring it for all natural persons as guarantors, regardless of the status of the creditor (professional or not),
clarification of the fate of the guarantee in the event of mergers or splits.
In the case of pledges of business assets, publicity formalities have been simplified. In addition, failure to register the pledge within the prescribed period will no longer be sanctioned by nullity, but by the unenforceability of the deed.
With regard to pledges of financial securities accounts, the parties will now be able to exclude, from the moment the security is created, the fruits and proceeds from the basis of the security.
In addition to the changes and deletions of security interests, the Ordinance introduces two new security interests in the Civil Code: the assignment of a claim as security (other than a security trust) and the assignment of sums of money as security (cash pledge).
It should be noted that one of the main innovations of the ordinance is the dematerialisation of all security interests, which can now be concluded electronically.
Finally, a decree will soon establish a single register of movable securities, freely accessible on the Internet, in accordance with the best international standards (its purpose being to enable creditors to find out about all the securities already provided by potential borrowers).