The Act on abolishment of transfer and pledge restrictions (Wet opheffing verpandingsverboden) was adopted by the Dutch Senate on 4 March 2025 and is expected to enter into force on 1 July 2025. The Act has significant implications for entrepreneurs, financiers, and contracting parties. In this article, we explain the contents of the Act, the rationale behind its introduction, and the practical impact it will have.

What is a right of pledge?

A right of pledge is a limited security interest allowing a creditor to encumber a movable asset or a receivable to secure a loan or credit facility. The primary purpose of establishing a pledge is to grant the creditor a preferential right to recover its claims from the pledged asset or receivable, ahead of other creditors. This enables financiers to enforce against pledged receivables in case of payment default, thereby mitigating credit risk and improving access to finance. However, a significant limitation has been the existence of contractual pledging prohibitions, which previously hindered the ability to pledge assets or receivables.

What is a pledging prohibition?

A pledging prohibition is a contractual clause that prevents a party from pledging a specific asset or receivable. Such prohibitions are often imposed by the counterparty to the debtor in commercial contracts, such as loan agreements or supply contracts, in order to prevent the use of receivables or goods as collateral. In practice, these clauses restrict businesses from obtaining financing by eliminating the possibility of offering collateral. As a result, lenders are less inclined to provide credit due to the lack of security. The Act on abolishment of transfer and pledge restrictions seeks to improve access to finance for entrepreneurs and to avoid unnecessary liquidity issues.

What Does the Act Provide?

The Act introduces several key changes:

• Contractual transfer and pledging prohibitions can no longer be enforced against third parties in relation to receivables arising from the course of a profession or business. Such clauses are rendered null and void. This means an entrepreneur may pledge a commercial receivable even if the underlying contract prohibits such pledge.
• ‘Negative pledge’ and ‘pari passu’ clauses between the debtor and a third party remain permissible, as these are not agreements between the creditor and the debtor of the receivable. A negative pledge restricts a debtor from granting security interests over its assets in favour of other creditors. A pari passu clause grants equal rights and ranking to multiple lenders with respect to certain obligations or accounts.
• Notice requirements: Where notification to the debtor is required for the transfer or pledge of a receivable, such notice must now be given in writing.
• Existing pledging prohibitions will become null and void three months after the Act enters into force.
• Certain receivables are excluded from the scope of the Act, including receivables from payment or savings accounts; receivables under syndicated loans or multi-lender credit agreements; receivables involving clearing houses, central banks, counterparties, settlement institutions, or netting institutions and receivables from specific blocked accounts used for tax or social security contributions (e.g., G-rekeningen).
  .

Implications for Entrepreneurs and Businesses

The new legislation brings several notable benefits:

• Increased access to finance: entrepreneurs will find it easier to obtain credit by pledging receivables, shares, and other business assets, enhancing flexibility and growth opportunities.
• Greater certainty for financiers: with the removal of pledging prohibitions, lenders can more easily obtain security, reducing credit risk and potentially improving loan terms.
• Contractual awareness: while the Act offers more freedom, it also requires businesses to exercise greater care when drafting contracts, in order to avoid conflicts or unintended limitations on the creation of security rights.
  .

Implications for Creditors and Other Stakeholders

The Act also affects financiers and creditors:

• Stronger creditor protection: creditors will now have more robust means to create and enforce pledges, enhancing their position in the event of insolvency or suspension of payments.
• Increased transparency: the changes clarify when assets and receivables may be used as collateral, contributing to greater transparency in the finance market.
  .

Conclusion

The Act on abolishment of transfer and pledge restrictions provides entrepreneurs and creditors with much-needed relief in the financial market. By eliminating the restrictions previously imposed by pledging prohibitions, the Act facilitates access to credit and encourages business development and innovation. At the same time, the Act strengthens creditor positions, contributing to a more dynamic and trustworthy commercial environment. However, businesses must remain alert to the opportunities and obligations the new legislation introduces. Careful contract review and strategic legal advice will be essential.

Do you have questions about the Act on abolishment of transfer and pledge restrictions? The team at SPEE advocaten & mediation is ready to provide you with tailored advice in corporate and commercial law.