On 22 December 2020, the State Council of the People’s Republic of China issued the Decision on the Implementation of Uniform Registration of Security Interests in Personal Property and Rights. Pursuant to the Decision, from 1 January 2021 the Credit Reference Center of the People’s Bank of China (PBOC) is authorised to operate a nationwide1, uniform system of registration of security interests in personal property and rights (the Uniform PPS Register), which is made publicly available for searches.
The launch of the Uniform PPS Register, together with the improved legal framework for security interests and guarantees under the new Chinese Civil Code2, is expected to significantly improve the transparency and efficiency of secured transactions in China.
The Uniform PPS Register
The Uniform PPS Register is an electronic registration system administered by the Credit Reference Center of the PBOC. The entire registration procedure can be completed online by registrants. In addition, the Uniform PPS Register also allows online searches of registered security interests.
The registration of security interests in the Uniform PPS Register is not subject to any substantive review or approval by the Credit Reference Center of the PBOC.
- Registerable security interests
- The following types of security interests are registerable in the Uniform PPS Register:
- mortgages over manufacturing equipment, raw materials, semi-finished products and finished products;
- pledges over accounts receivable;
- pledges over deposit receipts, warehouse receipts and bills of lading;
- finance leases;
- retention of ownership; and
- other registerable security interests in personal property and rights.
In the meantime, security interests3 in the following personal property and rights are excluded from the Uniform PPS Register:
- mortgages over motor vehicles, ships and aircraft;
- pledges over bonds, fund units and equity interest; and
- pledges over intellectual property rights.
Legal effect of registration in the Uniform PPS Register
The legal effect of registration in the Uniform PPS Register depends on the type of registerable security interest. For some, registration is a legal requirement not only for perfecting the security interest but also for the creation of the security interest; for others, registration is only required for perfection.