Modernisation of the Security Registration Regime in the UK
The UK Department for Business, Innovation and Skills (BIS) has published draft statutory instruments, amending the UK regulations as to security registration for companies and Limited Liability Partnerships (LLPs) registered in England, Wales, Scotland or Northern Ireland, as well as explanatory notes in respect of these draft statutory instruments.
The existing obligation on UK companies to register registrable security (including mortgages and a wide range of charges over assets), with a criminal sanction for failure to do so, is to be removed and replaced by a permission for all security (with a few exceptions) to be registered with no criminal sanction for failure to do so (except in limited circumstances). There will instead be a commercial motivation to register charges, as any registrable charge will become void if it is not registered within 21 days of being deemed to have been created. The draft regulations also create a more modern filing system to allow better identification and tracking of security creation and enforcement.
The proposed changes are positive, as they should improve transparency and will make filings in respect of security easier.