The law should specify that a security right is created by agreement between the buyer, grantor or financial lessee (hereinafter referred to as the grantor ) and the seller, secured creditor or financial lessor (hereinafter referred to as the acquisition financier ) which is in writing and evidences the intent of the grantor to grant a security right or is accompanied by delivery of possession pursuant to the agreement and in accordance with recommendation 9.

(2) such insurance fund operation as guarantee, financing and investment, etc.

The law should treat all devices that perform security functions as secured transactions, including the transfer of title to tangibles or the assignment of intangibles for security purposes, retention of title, financial leases and hire purchase agreements, except to the extent otherwise contemplated in recommendation 7 .

Equivalence of acquisition financing devices to security rights

Security for post commencement finance (paras. 103 and 104)

(e) The transfer of security rights in, sale, loan or holding of or agreement to repurchase securities or other financial assets or instruments held with an intermediary

Agreement on Promotion, Protection and Guarantee of Investments among Member States of the Organisation of the Islamic Islamic

Attracting post commencement finance providing priority or security

Acquisition security rights include those that are denominated as security rights, as well as those that are denominated as retention of title, arrangements and financial leases.

the law governing the security agreement.

The law should provide that the priority, provided under recommendation 130, for an acquisition security right in inventory over a pre registered security right in the same goods applies to the proceeds of such inventory, provided that the acquisition financier notified pre registered financiers with a security right in assets of the same kind as the proceeds.

(d) The transfer of security rights in sale, loan, holding of or agreement to repurchase securities or other financial assets or instruments held with an intermediary

Due to the absence or limited role of personal guarantees or securities provided by the project sponsors, project finance is said to be non recourse or limited recourse financing.

The availability of such security was considered crucial for the availability of financing for privately financed infrastructure projects.

(ii) The seller or financial lessor of the same encumbered asset that has retained title to it pursuant to an acquisition security right

(g) Security agreement means an agreement between a grantor and a creditor, in whatever form or terminology, that creates a security right.

Note to the Working Group The commentary will make it clear that rejection of a credit agreement does not terminate the security agreement and does not extinguish the security right.

The purpose of the provisions of the law on acquisition financing devices (sales with a retention of title arrangement, purchase money security devices and financial leases) is to

The law should provide that the security agreement must, at a minimum, identify the secured creditor and the grantor, and reasonably describe the secured obligation and the assets to be encumbered.

The law should provide that an acquisition security right is subject to the recommendations in this Chapter regarding effectiveness against third parties and priority even if the acquisition financier (i) also has a security right in the goods securing non acquisition obligations of the grantor or (ii) has a security right in other assets of the grantor securing the payment obligation relating to the acquisition security right.

The law should specify that a security right is created by agreement between the grantor and the secured creditor which is in writing signed by the grantor in accordance with recommendation 12 that evidences the intent of the grantor to grant a security right or is accompanied by delivery of possession pursuant to the agreement and in accordance with recommendation 9.

The law should provide that, unless the parties otherwise agree, a security right becomes effective as between the parties at the time the security agreement is concluded or at the time the encumbered assets are delivered to the secured creditor.

Creation of a security right by agreement

The deposit given by the customer, all the securities that have been purchased through securities lending and borrowing, and all the funds from the sales of securities are collaterals to the securities firm, and shall be deposit to the customer securities guarantee account or the customer funds guarantee account and credited to the customer s credit granting account.

The law should provide that, notwithstanding recommendation 29, the security right extends to civil and natural fruits of encumbered assets, such as , only if the parties so provide in the security agreement.

Frequently, the only unencumbered assets that may be available for securing post commencement finance will be assets recovered through avoidance proceedings.

The law should provide that, in the case of default on the part of the buyer, grantor or financial lessee, the seller, purchase money secured creditor or financial lessor has, to the maximum extent possible, the same rights and remedies as the holder of a security right.

First, normal bankruptcy rules don t apply to repos. Second, much repo financing flows into large risk taking financial firms like MF Global, Lehman, and Bear Stearns through money market funds, which must invest very short term, because their depositors want immediate liquidity.

No units or individuals shall force, incite, assist or accept the securities firm to provide financing or warranty with the assets of the securities brokerage customers or securities assets management customers.

(e) Security rights acquired by way of transfer of title and all other types of rights securing the payment or other performance of one or more obligations, irrespective of the form of the relevant transaction and whether ownership of the encumbered assets is held by the secured creditor or the grantor, including the various forms of retention of title, financial leases and hire purchase agreements

As a part of the deal, the Government issued bonds in order to cover a guarantee of the refinanced loans.

(b) Export Loan Guarantees guarantee schemes to support domestic and export financing for SMEs are generally operated by government agencies or non profit organizations.

(66) The law should specify that a security interest over the assets of the estate to secure post commencement finance does not have priority ahead of any existing security interest over the same assets unless the insolvency representative obtains the agreement of the existing secured creditor(s) or follows the procedure in recommendation 67.

The Multilateral Investment Guarantee Agency (MIGA), the newest member organization of the World Bank Group, facilitates investments through the provision of investment guarantees against the risks of currency transfer, expropriation, and war and civil disturbance.

Some speakers pointed out that there should be better coordination among donors and that risk should be shared with private financial institutions in the design of guarantees.

It would be useful to consider ways in which investment risks would be shared by the parties with the backing of existing or future financial institutions.

(65) The insolvency law should enable a security interest to be granted for repayment of post commencement finance, including a security interest on unencumbered assets, including after acquired assets, or a junior or lower priority security interest on already encumbered assets of the estate.

(2) Where any shareholder and actual holder of a securities firm force, incite, assist or accept the securities firm to provide financing or warranty with assets of stock brokerage clients or stock asset management clients

When shocks hit a fragile financial system, as in 2007 and 2008, the government has reason to guarantee the money market funds, as US authorities did. These implicit government guarantees attract more money into these financial channels from nonguaranteed channels, and more hot money flows into firms like MF Global, Lehman, and Bear via repo.

(b) (i) Transactions on a regulated exchange (ii) foreign exchange transactions (iii) inter bank payment systems, inter bank payment agreements or clearance and settlement systems relating to securities or other financial assets or instruments (iv) the transfer of security rights in sale, loan or holding of or agreement to repurchase securities or other financial assets or instruments held with an intermediary.

The insolvency law should provide that, in the case of the insolvency proceedings of the grantor, the acquisition financier has the rights and duties of a holder of a security right.

Article 50 A securities firm that carries out securities lending and borrowing business shall sign a securities lending and borrowing contract with the customer, and shall open a customer securities guarantee account with the securities registration and settlement organs, and a customer funds guarantee account with the designated commercial bank in the name of the securities firm in accordance with the provisions of the securities regulatory agency under the State Council.

The law should specify that a security interest over the assets of the estate to secure post commencement finance does not have priority ahead of any existing security interest over the same assets unless the insolvency representative obtains the agreement of the existing secured creditor(s) or follows the procedure in recommendation 67.

(c) Foreign exchange transactions, inter bank payment systems, transfer of security rights and transfer of economic assets

The insolvency law should enable a security interest to be granted for repayment of post commencement finance, including a security interest on an unencumbered asset, including an after acquired asset, or a junior or lower priority security interest on an already encumbered asset of the estate.