Floating Charge and Financial Collateral Directive

Abstract

Floating charge falls outside the Financial Collateral Arrangements Regulations (UK) and the Financial Collateral Directive (EU).However, this paper will argue an innovative and instantaneous way of making floating charge to fit within the FCAR.The benefit of falling within FCAR is that formality (e.g. registration requirement) can be omitted. Also, certain insolvency provisions are disapplied for the benefit of lenders. Thus, this paper is very useful if business wants the FCAR benefits. Lenders do not have to worry about own fixed charge being (unfortunately) re-characterised as floating charge without prior registration, because now your 'floating charge' falls within FCAR using my argument.