General Storage Company Limited is a company importing frozen fish fillets from Canada. The imported fish purchased by the company are stored in a go-down in the New Territories pending resale.

Last week, the company approached Tuna Bank Limited to finance purchases of HK$ 3 million worth of fish. The bank wants some form of security. However, the assets of the company are the imported fish and book debts and there are no fixed assets held by the company. The bank wants security which can be registered and which will retain priority over other security.

Required:

Advise the bank on the following

a) The form of security and the associated risks the bank would take;

b) The registration requirements for the security;

c) How the bank can ensure that it maintains its priority.