When taking security over a vessel registered on the UK Ship Register (UKSR), one of the first documents we order is an up-to-date transcript of registry.
Various transcripts or certificates can be obtained for vessels registered, or formerly registered on the UKSR. Not to be mistaken for a certificate of registry (as discussed below), a transcript of registry provides a snapshot of a vessel's registration details at any given date, much like a title sheet for a property, and can be requested from the UKSR.
The main things a transcript of registry will confirm which are relevant to taking security over a vessel are:
1. Type of vessel
There are various vessel types (including fishing vessels) and we require to confirm this in order to take security correctly over a vessel.
2. Official number
The official number is a unique identifier for the vessel, important for describing the asset in security documents. When a vessel is registered on the UKSR it will receive a unique official registration number which will remain consistent for the vessel whilst registered under the UK flag, not dissimilar to a company number. Even if the vessel is renamed it will retain its official number.
3. Type of registration (fishing vessels only)
A fishing vessel can have either 'Simple' or 'Full' registration at the UKSR. Crucially, in terms of taking security over a fishing vessel, only fishing vessels with 'Full' registration can be subject to a marine mortgage and therefore, 'Simple' registrations will require to be updated to 'Full' as soon as possible.
4. Who owns the vessel
For the purposes of registration, ships are divided into 64 shares. There is no settled explanation for this other than the fact that the shareholding can always be divided by two. A single share or shares in a vessel may be owned individually or by up to 5 individuals or companies (or a mix of both), as joint owners. The transcript of registry confirms ownership details (name and address/registered office) of the shares in the vessel, ideally matching what is shown on Companies House if the owner is a company.
5. Whether the vessel is subject to any mortgages
The transcript of registry details any mortgages which have been granted over the vessel. This will include historic mortgages which have been granted by previous owners (but not subsequently formally discharged), as well as any mortgages granted by the current owner. If there are any prior ranking or priority mortgages showing against the vessel, in most cases these will require to be discharged prior to a lender taking security.
It is also important to note that the UKSR will not recognise or register any form of ranking agreement and therefore, if security is to be ranked in a specific order, any existing mortgages must be discharged and then each mortgage registered in the required order of ranking.
6. Gross tonnage of the vessel
The gross tonnage of the vessel will inform our inclusion of certain obligations in terms of relevant maritime codes (e.g. the International Ship and Port Facility Security Code) in the security documents.
Historic and closed transcripts
It is also possible to obtain a historic transcript and a closed transcript from the UKSR, though it is rare that these are required in most instances where security is being taken.
The historic transcript will contain details of when a vessel was first registered on the UKSR and all subsequent changes made to a vessel's registration while registered on the UKSR.
The closed transcript confirms a vessel is no longer registered on the UKSR and shows registration details at the time the registration was closed, including any remaining, outstanding mortgages registered against the vessel.
Certificate of registry
The transcript of registry differs from a certificate of registry, which is a document issued when the vessel is registered for the first time or upon change of ownership. The certificate of registry is valid for 5 years or on change of ownership and is only reflective of the position as at the date of registration. It is also important to note that a certificate of registry will not reflect any mortgages registered which is why a transcript of registry is required when preparing to take security over a vessel.
If you require assistance with any type of marine finance, please contact the marine finance team at Brodies LLP.