The parliament of Jersey, a UK crown dependency, has passed a new security interests law, which represents a significant change to the way in which security will be taken over intangible movables under Jersey law and will introduce simpler methods of enforcement and the concept of registration, reports the offshore law firm Ogier.

The law has now been sent to the UK government for approval. Ogier said it will come into effect early next year. Security Interests Law 201 aims to introduce simpler methods of enforcement and the concept of registration.

Existing security will still be valid under the current legislation as well as having priority over new creations under the new law, as long as the duration of the security is not extended or reduced or the collateral is not modified in any way. Ogier said it is advising holders to be alert when making changes to existing security once the new law is in use.

When the new law comes into force, owners will be free to decide whether it should apply to existing security agreements. This will enable lenders to impose new security agreements which take advantage of the new law. For that reason, Ogier suggested people should revise security agreements to include provisions to require the grantor to agree to such change.