Pledge of book entry securities by a property guarantor

Abstract

The development of international cooperation and European integration processes require reforming the legislation of Ukraine in the field of pledge of property rights, in particular securities, where the mortgagor is the property guarantor. The development of mortgage relations is conditioned by the diversity of provisions enshrined in national law and the lack of a uniform law enforcement practice for the property guarantor to fulfill its obligations.

Directly, it should be noted that the property guarantor may be the subject of a mortgage relationship. In this case, the legal regulation of the pledge of securities by the property guarantor in essence has no features in the legal regulation in comparison with other entities and is characterized by a significant number of regulations, due to the peculiarity of securities as the subject of mortgage relations.

It is established that the property guarantor undertakes to repay the debt instead of the main debtor within the value of the property, which he mortgages or pledges, and therefore the blocking of book entry securities leads to problems of recovery and sale of collateral.

It is concluded that it is necessary to limit the provision of the following pledges of book entry securities by property guarantors.

The problems that may arise when mortgage-backed securities are pledged by a property guarantor are analyzed, and therefore it is proposed to amend the current legislation of Ukraine in order to protect the rights of mortgagors, namely to provide that in case of bail by corporate guarantors, in particular, but not exclusively the shares of a joint stock company, another person declared bankrupt, establishing the fact of improper performance by the property guarantor of its obligations as a participant (founder) of the person, the mortgagee has the right to receive the amount insufficient to fully satisfy the claim, on the other the property of the mortgagor in the order of priority provided by the legislation of Ukraine or by agreement with the property guarantor to replace the subject of the pledge, unless otherwise provided by the pledge agreement. as a participant (founder) of the person (if the mortgagor is the owner of a significant share).