Uganda has recently undergone reform of their secured transactions law. Previous to this reform, security interests were governed by the Chattel Security Act 2014. The new law came into force on the 31st of May 2019, and it is called The Security Interests in Movable Property Act. By comparison to the 2014 Act, this new reform provides for a wider scope of assets that may be used as the subject of security interests. The 2019 Act allows movable property to be the subject of a security interest. Notably, it allows for intangible assets, such as intellectual property, to be used as security for obligations. This is intended to increase access to credit for smaller businesses. The Act does not apply to immovable property, which is still governed by the Registration of Titles Act, Chapter 230 (1924). However, the new law does apply to movable property that is attached to immovable property. As per Article 37, if a tangible asset becomes a fixture because it becomes attached to land, the asset can still independently be the subject of a security interest under this law. A security interest in the fixture asset will have priority over a mortgagor or transferee of the land, so long as the security interest has been perfected. The new law also creates a unified, low-cost electronic register for all security interests, the Security Interest in Movable Property Registry System (SIMPRS), which went live on the 1st of October 2019. In order to perfect a security interest, the creditor must either register the transaction or take possession of the asset. This is important because perfected securities will take priority over those that are not. Security interests in immovable assets are also outside the scope of the SIMPRS, and formalities are governed by the Registration of Titles Act.
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Last Checked October 2020
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