Creation of security interests

The existing rules relating to the creation of security interests vary considerably according to the type of interest created.   This working group has been looking at the simplification of these rules, and the reduction of formalities such as writing where appropriate.

Registration of security interests

It is vital that a system for the registration of secured transactions should enable all potential creditors to discover whether a debtor’s apparent property is subject to a security interest and should enable those taking security to secure their priority against possible competitors by simple and easy steps.   This working group is considering:

• Methods of perfection of security. See PAPER 1 Methods of Perfection
• Who can create registrable security under the proposed scheme? Should a new scheme be extended to unincorporated businesses and to consumers? See PAPER 2 The person of the grantor of security
• What are registrable interests? A consideration of registration of quasi-security interests, outright sales of receivables and negative pledges and the interaction with the law on ban on assignment clauses. See PAPER 3 Recharacterisation
• Electronic registration: the future for interconnectivity of registers [technical questions] and the issues of notice and priority – to whom should a register provide a notice, should registration create priority and who should take the risk of incorrect registration?

The current law

What is wrong with the current law of registration of security interests created by companies?

We would like to know what you find difficult, inefficient or problematic.   Please do email us with your views.