Delivery (Swedish: tradition) means that the pledgor hands the share certificate to the pledgee or someone holding it on their behalf. In a pledge of shares where certificates have been issued, this is required for the pledge to obtain third-party protection, effective against the pledgor's creditors. The pledgor loses possession of it.
Without share certificates, the pledge is instead made through denuntiation, that is, a notice to the company. The pledge should also appear in the share ledger.
A pledge of shares means shares are provided as security for a debt, often a loan.
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Third-party protection means that a right to property, such as shares, also applies against third parties.
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A notice of pledge (denuntiation) is a notice that gives the pledgee protection against third parties.
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A share certificate is written proof that a person owns certain shares in a limited company.
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