SWITZERLAND Law and Practice Contributed by: Daniel Haeberli and Simone Gloor, Homburger
Mortgage assignments and the creation of mortgage certificates are established through an agreement between the parties, which is for- malised by a notarised deed and entered into the land register. The security transfer or pledge of the mortgage certificate is documented in a security transfer agreement and requires the transfer of the original mortgage certificate in paper form ( Papier-Schuldbrief ) (including appli- cable endorsements) to the transferee or secu- rity agent or, in the case of a registered mortgage certificate ( Register-Schuldbrief ), the entry of the transferee in the land registry. The most recommended method for establishing security over Swiss real estate in connection with acquisition financings and other group financ- ings is through an outright transfer of mortgage certificate(s), especially if such mortgage certifi- cates have already been issued. In this way, the claims of the secured parties can be supported by property owned by the borrower or a third party (third-party security). Movable Assets Security over ships and aircraft can be created by entering the security interest in the respec- tive register. However, for other movable assets, such as machinery, trucks and trains, the per- fection of a security interest requires transfer- ring possession of the asset to the pledgee or security agent. This is not practicable for assets that serve the operational business. The rules that apply to inventory (as mentioned above) also apply here. 5.2 Form Requirements The perfection of the pledge of bank account receivables and other receivables, as well as any security assignment of the same assets, requires a written security agreement. The secu- rity interest over intellectual property rights is
also perfected by a written security agreement. As a matter of Swiss law, any agreement that is legally required to be made in writing must be signed by the parties with a wet ink signature. Swiss account banks usually have a prevail- ing security interest in any assets held by the account holder with the respective account bank, as per their general terms and condi- tions. Therefore, to perfect the pledge of bank accounts (but not of a security assignment), it is necessary to notify the prior-ranking pledgee, which is the account bank, of the subordinated pledge. Moreover, the obligation to notify applies to any debtor of receivables who holds a security interest in receivables that have a higher priority than those being pledged. In order to perfect a security interest in inventory and movable assets, the security provider must relinquish exclusive control, and the secured party must obtain physical possession of the inventory. The form requirements of creating a security interest over real estate are explained in more detail in 5.1 Types of Security Commonly Used . 5.3 Registration Process Under Swiss law, security interests that are per- fected by registration are the exception and are only available with respect to security created with respect to ships and aircraft, as well as mortgage certificates that have been issued in registered form ( Register-Schuldbrief ). The reg- istration is obtained by submitting the required documentation to the relevant registry. Upon submission, and subject to the accuracy of the submitted documentation, the registry will undertake the registration in the relevant regis- try. The registration perfects the security interest. Once the registration is obtained, the security
481 CHAMBERS.COM
Powered by FlippingBook