Credit financing and million-dollar transactions prompted the need to strengthen the position of the creditor. Rapid realization and collateral liquidity in the area of securities receivables have become the main focus of the new regulation. Directive 2002/47/EC on financial collateral was adopted with the aim of effective collateral implementation in the Member States of the European Union. In addition, the Directive prohibits the use of formal requirements and procedures and seeks to establish an integrated financial market. The Financial Collateral Act implements already established legal forms of collateral (encumbrance and transfer of ownership rights) into Slovene legislation and adapts them to the specific requirements of the Directive. The new regulation foresees specific treatement of financial collateral arrangements, which protects them against the effects of insolvency proceedings. In case of receivables collateral with financial instruments, special and general – obligation and property law – provisions are intertwined.
Financial collateral rules apply only in cases where receivables are insured by professional entities listed in the Act with financial instrument, cash or a bank loan. The out-of-court sales of the collateral object by the collateral beneficiar is established as a rule. Appropriation of object or offsetting of receivables also speed up the repayment process. Due to the presumption of the professionalism of entities, rules on financial collateral depart from cogent provisions of general rules applicable to collateral claims, which apply to pledge or transfer of ownership. The provider and the beneficiary of collateral agree on mutual rights and obligations with a financial collateral agreement. In case of a non-performance by a collateral provider, the beneficiary may be compensated by means of an out-of-court repayment. The Financial Collateral Act allows for several repayment arrangements. Deviation from general property rights and obligations rules is seemingly reducing legal certainty of the collateral provider. However, the legal position of the debtor may be secured in a different way.