Pledges and security transfers of securities

On registration. Under § 45(1) of Act No. 566/2001 Z. z., a contractual pledge over securities arises, unless that Act provides otherwise, upon registration in the separate records of pledged securities — the pledge register. The central depository maintains this register for certificated securities and for book-entry securities recorded in its issuer register. A signed pledge agreement without registration does not create the pledge.

A fundamental one. If the articles make the transferability of registered shares subject to company consent, company consent is also required to create a pledge over those shares; otherwise the pledge does not arise (§ 156(11) of the Commercial Code). A similar rule applies to pledges, pre-emption rights and transfer rights in a simple joint-stock company under § 220p of the Commercial Code. We therefore address consent at the outset, before the depository returns an instruction.

With a pledge, the pledgor remains the owner of the securities and the creditor has the right to satisfy its claim from the collateral. With a security transfer, the securities are transferred to the creditor and returned once the obligation is fulfilled. A securities security transfer agreement must be in writing, and the depository records these transfers in a separate security transfer register (§ 53 of Act No. 566/2001 Z. z.). The appropriate route depends on who should exercise rights under the securities during the security period and how the security is to be enforced.

Yes, but not for everyone. The Act provides a special financial collateral regime (§ 53a et seq. of Act No. 566/2001 Z. z.) that excludes some general rules. It applies only where both the secured creditor and the pledgor fall within an exhaustive list of eligible persons, typically banks, securities dealers, insurers, central banks and similar entities. An ordinary business loan between two companies does not fall within this regime. We first establish which regime applies, because the entire documentation depends on it.

Under the special financial collateral regime, the law expressly permits sale of the collateral, appropriation by the creditor, set-off against the secured claim or use of the collateral to settle it. Appropriation is possible only if the parties agreed to it when entering into the agreement and also agreed how the security would be valued (§ 53b of Act No. 566/2001 Z. z.). Outside that regime, the general rules apply. The enforcement method therefore belongs in the agreement from the outset, not in an amendment after default.

An exact date cannot be promised. The depository does not assess or process instructions and supporting documents on the day of receipt, and registration of a contractual pledge is available only in person at the operational office at its registered address. If the securities are held in an account with a depository member or in a custody account, submission goes through that member or custodian, whose own process adds time. We take this into account in the drawdown timetable.

Yes, and the law provides for this. If registered tag-along or drag-along rights exist over shares in a simple joint-stock company and the entitled shareholder consents to the pledge in writing, the creditor may enforce the security regardless of those rights — which end on transfer to the acquirer (§ 220w(7) of the Commercial Code). That written consent is critical in startup financing, and we prioritise it during preparation.