This section explains the statutory RSP correction processes provided for by both the 2023 Act and the 2024 Rules and details our approach to each route to RSP correction.
Approach to correction
With one exception, the 2023 Act provides for a wholly optional approach to RSP correction.
The one exception is where enforcement has extinguished a statutory pledge. In that instance, the secured creditor must apply for correction to remove the statutory pledge from the register (section 78(2) of the 2023 Act).
If you are the secured creditor for a registered statutory pledge which has been extinguished by virtue of the enforcement of the pledge, enforcement of any other secured right, or the enforcement of diligence, you are legally required to correct the register to remove that statutory pledge. You can correct the register to do this.
Otherwise, correction of the RSP is wholly optional.
It is in the best interests, however, of all prospective and existing users of the RSP, both borrowers and lenders, to ensure that the RSP represents as accurate a picture of current available finance as possible.
Updating the register to give effect to discharges and restrictions of registered statutory pledges is therefore particularly important.
A searcher of the register will wish to be able to establish whether party A has previously granted a statutory pledge over property B or not.
A prospective lender to party A may not lend if that search reveals existing borrowing over property B. Party A, in that case, may not be able to obtain required finance over property B.
Alternatively, post-search investigation may be required in order to determine whether a registered statutory pledge by party A over property B still exists or not. Enquiries of the registered secured creditor will be required.
The RSP correspondence regime introduced by the 2023 Act is impacted upon, however, where the register is not updated to give effect to an assignation from a registered secured creditor to a new secured creditor who then holds that security right off-register.
Updating the register to remove defunct statutory pledges, restrict existing statutory pledges and to reflect assignations has an important play in the ongoing accuracy and effectiveness of the RSP as a searchable public register and also promoting ease of access to available finance.