Clause 3: Application
This clause states that security interests in movable assets will no longer be registered as notarial bonds from a specified date. Members of the pubic welcomed the development, in particular, given the current challenges faced in the registration of notarial bonds. It was highlighted that the costs of registering notarial bonds were prohibitive and therefore a deterrent to investors. However, members of the public are hopeful that the registration fees for security interest in terms of the Bill will be more administrative than anything else. Thus, there is need to ensure that that borrowers are not overburdened with high security costs and therefore it is imperative that the registration fees be pegged at affordable levels, which will only cover the costs of operating the registry.
Clarity was also sought on whether it is mandatory or not to involve conveyancers in the registration of movable property as is the case with the registration of immovable property and notarial bonds.
Clause 4: Establishment of Collateral Registry
Whilst there were no objections with the establishment of a Collateral Registry, members of the public and business organisations pointed out the need to consider housing the registry under the existing Deeds Registry Office. This would ensure that one public office is responsible for matters relating to the registration of securities for movable and immovable assets. The Registrar must be a public officer in the same manner as the Registrar of Deeds and the Registrar of Companies.
There were also numerous calls for the registry offices to be decentralized so that borrowers do not travel long distances to register their security interests as this might increase costs. It is however, the Committees’ understanding that creditors will register their security with the financial institutions who in turn will register these with the Collateral Registry electronically, hence there will be need for decentralization.
Clause 4 (3) provides for the position of the Registrar of Collateral Registry, who shall be appointed by the Governor of the Reserve Bank. This provision was found to be contrary to the powers given to the Governor in section 59 of the Reserve Bank Act. It was recommended by members of the public that such appointment be done in consultation with the Minister, for purposes of enhancing transparency.
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