Fiduciary Financial Advisor: Definition and Examples

monarchcb.com - The term fiduciary can be foreign to some people. However, if you are a customer of a financial institution, whether banking or other financing industries, the term fiduciary must have been heard very often. Well, then this is an interpretation, under the law, and a fiduciary illustration that you need to know.

What is a Fiduciary?

Fiduciary is derived from the Dutch language Fiduciaire Eigendom Overdracht and English Fiduciary Transfer of Ownership which means the surrender of ownership rights based on belief.

Fiduciary in Indonesia is legally stipulated in Law No. 42 of 1999, which is the transfer of ownership rights to an item under belief with the determination that the item whose ownership rights are transferred is within the ability of the item owner.

Under Fiduciary Law

In Indonesia, the application of fiduciary is regulated in Law No. 42 of 1999 concerning Fiduciary Collateral. In this provision, it is explained that fiduciary collateral is a collateral right on movable property, whether in shape or form, and immovable property, especially buildings that cannot be encumbered with trust rights.

Not only that, fiduciary is also regulated in Law No. 4 of 1996 concerning Trust Rights which always lies in the ability of fiduciary donors as collateral for the repayment of special loans, which gives priority to fiduciary acceptors to other creditors. This legal provision is made to prevent and facilitate the parties to this contract, especially loan donors.

Comparison of Fiduciary With Pawn

Even with leaving a legacy, there is a striking comparison between fiduciary and collateral, then the key comparison.

Fiduciary collateral must be made with a notarial deed and registered with the fiduciary registration office, on the other hand, collateral does not need a registration method.

The fiduciary property rights are handed over to the creditor, while the controlling collateral is the collateral holder even though the voting rights are with the collateral donor.

The latest fiduciary collateral can be executed when the debtor records a default in the main contract. The subject of fiduciary collateral can be sold with the authority of the acceptor. The execution is carried out by 2 methods, namely by auction or negotiation. In contrast to collateral, there are 2 types of execution, the subject of the collateral can be sold without the approval of the head of the legal panel and can also be tried with the permission of the jury of the legal panel.

Fiduciary Collateral Deed

As a form of security, fiduciary collateral can be formalized in a deed determined by a notary. Taken from prospectu. com, with this deed, so that either the debtor or creditor will get protection and no one will be burdened.

For creditors, a fiduciary deed is the basis and legal power to withhold inheritance if the debtor cannot repay the loan. Moreover, debtors also get profit in the form of legal support from legal officers for attempted executions.

On the other hand, the deed also prevents debtors. Because with the existence of this deed, the debtor wants to be safe from the existence of possible late actions attempted by the creditor.

In a fiduciary deed, the provisions and situations related to the method of execution or confiscation have been arranged according to the right calculation. As an illustration, it is related to the minimum loan amount that must be paid so that the ownership status of the goods can be returned to the borrower.

Fiduciary Execution Rights

As special collateral, fiduciary has ease in terms of execution which is an advantage when compared to ordinary collateral. There is also a form of relief, namely the existence of a right given by law to creditors to sell fiduciary subjects with their own authority.

Although it sounds easy because creditors can do it themselves, but in fact the implementation of this execution is not easy. In practice, it is often encountered that there are problems such as debtors who do not want to provide the subject of collateral, there is a revocation by suing by the creditor, and moreover it is not often that the subject of the collateral has transferred its control to a third party.

In Article 15 section (2) of the Fiduciary Law there is the word "For Equality Based on the One Godhead", which has executive power similar to that of a legal tribunal with legal capacity at all times. Above and below, until the creditor or acceptor of fiduciary collateral has the right to carry out executions, namely selling goods that are the subject of fiduciary collateral on their own power. The marketing of goods by creditors can be tried through ordinary auctions or on the basis of hands with the debtor's agreement.

Obligations of Fiduciary Holders

As the party responsible for holding the fiduciary, the fiduciary holder has responsibilities and obligations that are right and legal. Furthermore, some of the obligations of the fiduciary holder:

As a party that accepts a fiduciary role on behalf of the other party, you must be responsible for participating in managing appropriate inheritance with the owner's needs.

Justify that there are no problems or clashes of needs that arise between the fiduciary holder and the owner of the inheritance.

In accordance with the provisions of its provisions, the fiduciary holder must disclose the original situation of the relics sold to potential customers, and shall not seek to profit from the marketing of the relics.

A fiduciary deed is always useful even if the owner of the relic dies, especially if the assets are part of the plantation or other matters requiring management and supervision.

Fiduciary Collateral Illustration

One illustration of fiduciary collateral is when you buy a house with a mortgage system. Loan donors or banks buy houses that developers want to occupy. Next, consumers are allowed to ride and use the house as if it were legal property. However, the house is always entirely in the hands of the loan donor until the collateral is paid off.

On the borrower's side, the trust deed is a fact of protection, as a result the loan donor cannot immediately take the house if there is a sudden default in installment payments. The deed is the legal basis for an inheritance or confiscation of inheritance if the borrower cannot repay the loan.