Creating a Transparent Legal Framework: An Overview of Greek Law 5123/2024 for Pledge Execution and Registration2 August 2024

Innovative procedures are introduced with the following key provisions of the Law, that present significant interest:

• the pledge of rights or claims is created through an agreement between the pledgor and the pledgee which,in case of a pecuniary claim, will determine, as a minimum, a description of the pledged claims (including the amount thereof and the relevant debtor), as well as the secured obligations. Such agreement will be registered with the Electronic Registry of Pledges (except for accounts pledge, in which case no registration is required if the account is kept with the lending bank) (Article 5). Similar provisions apply for the pledge of registered shares (Article 11), share units, joint venture and private companies’ participations (Article 12) and the notional pledge (Article 13);
• notification of the pledge to the debtor will be from either (either the pledgor or the pledgee) by a court bailiff or by electronic means (e-mail etc.). No notification is required if the debtor is also the pledgee or pledgor or, alternatively, a party to the pledge agreement (Article 6);
• the pledgor has the right to collect, without any further proceedings being required, the pledged claim following the lapse of ten business days from the date the secured claims became due and payable (partially or in total) (Article 9). This is a significant new provision, as it facilitates the pledgor proceeding with the attachment of the pledged asset or claim within a very short time frame and without any judicial act been required; and
• chapter E of the Law introduces a significant new legal tool in the Unified Electronic Pledge Registry where all pledge agreements (including any amendments and releases of pledge agreements) over assets, claims or other rights are mandatorily registered. The Electronic Pledge Registry, which will be operated by public law legal entity Hellenic Cadastre, aims to safeguard the safety of transactions, publicity of registered acts and credibility of registered data. The particulars of operating the Electronic Registry of Pledges, procedures for submitting agreements to be registered, the legalisation documents accompanying each registration, application, the applicable registration fees and the procedures for issuing certificates and extracts from the Registry’s records, will be agreed by Hellenic Cadastre’s’ Board of Directors. Thw law will come into force, when said decision is published or on 31 December 2024, whichever comes first.