# **<mark>Box 2: Key Provisions that Laws and Regulations Should Include About the Secured Transactions Registration System</mark>**

- _<mark>Registry Mandate</mark>_ <mark>: the registry is the place to register security interests in movable assets. An institution must be assigned responsibility for its operation</mark>

- _<mark>Centralized registry</mark>_ <mark>for the whole jurisdiction. Decentralized registries by region are very costly and less effective as all the information needs to be linked into a single dataset.</mark>

- _<mark>Unified registry for all security interests in movable property.</mark>_ <mark>The registry should include notices of all types of security interests (including financial leases, assignments of receivables, etc.) in all types of movable property of all kinds of debtors.</mark>

- _<mark>Electronic registration and web based systems</mark>_ <mark>: the electronic record is the official record (particularly important with web based systems). It is critical that registration of notices become effective in real time, and that searches reflect real time information on security interests in movable property so that creditors can make informed financing decisions and protect their right on the collateral. This can only be effectively achieved through a web based system with live registration of notices.</mark>

- _<mark>Public record and public access to the information</mark>_ <mark>: access to the information available to the general public without proof of any particular need, from widely available access points, and without undue delay.  The registry should be accessible at hours other than normal business hours of the registry.</mark>

- _<mark>Notice registration</mark>_ <mark>. Registration requirements must be kept as simple for the user as possible in order to eliminate errors and to encourage use. The information that needs to be entered is usually limited to information on the creditor, the debtor, the amount of the loan (which is usually entered but not disclosed to the public) and the description of the collateral. There is no need to register any documents (such as the credit agreement), no formalities such as signature or notarization are required</mark>

- _<mark>Types of notice that may be registered and duration of notices.</mark>_ <mark>The registry should allow for different types of registrations (initial notice, amended notice, termination or discharge, continuation of effectiveness or extension and objection to registration by debtor) and for determining the duration of a registration.</mark>

- _<mark>Cost effectiveness:</mark>_ <mark>The fees charged by the registry for registration and searching should be limited to the level required to recover the costs of operation of the registry.  The transactional cost must not deter users from registering. The fee should be a fixed amount for each registration or search independently of the nature or amount of the loan. Reasonable fees would generally range between $5 and $10.</mark>

- _<mark>Registry duties and authority</mark>_ <mark>. The registry should apply a fixed, consistent set of rules to make decisions to accept or reject notices and to identify notices in response to a search request. Finally, the registrar’s office should not verify the information entered. The burden is on the registrant to provide correct information.  If the registrant provides inaccurate information, the secured creditor risks losing its priority if the error makes the notice undiscoverable</mark>

- _<mark>Security of data and disaster recovery mechanisms.</mark>_ <mark>The physical computer infrastructure must be housed in a stable, climate-controlled environment, in a secure location.</mark><sup>23</sup> <mark>The main server should be backed up or replicated in another location to prevent the data from being damaged or lost.</mark>

In terms of the potential institutions that are usually capable of operating a movable collateral registry, these may include: the Central Bank, the Company Registry, the Credit Information Center or Credit Bureau, the Ministry of Finance, the Ministry of Industry and Trade. There are successful experiences in a number of countries in which the host institutions for the registry are

> 23 _Publicity of Security Rights:  Guiding Principles for the Development of a Charges Registry,_ European Bank for Reconstruction and Development (EBRD), 2004, Annex:  Technical Requirements for a Charges Registry, page 18.

18