Part 3: Part 3: Perfection
Article 11 - Perfection of Security Interest(1) Subject to Article 12, a
Security Interestin particular Collateralis perfected when:(A) the Security Interestis enforceable against third parties; and(B) one of the following applies:(i) a Financing Statementis filed ;(ii) the Secured Partyhas possession of the Collateral(other than possession as a result of seizure or repossession);(iii) in the case of Investment Propertyand Bank Accounts, the Secured Partyhas control of the Collateral; andregardless of the order of occurrence.
Article 12 - Security interests perfected upon attachment
Security Interestsare perfected when they attach:(A) an assignment of receivables;(B) a Security Interestcreated by a Securities Intermediaryin Investment Property;(C) a Security Interestin a Commodity Contractor a Commodity Accountcreated by a Commodity Intermediary;(D) a Security Interestin Financial Collateral.
Article 13 - Perfection: possession(1) A
Security Interestin:(A) Goods;(B) an Instrument;(C) a negotiable Document of Title;(D) Money; or(E) Chattel Papermay be perfected by possession of the Collateralby the Secured Partyor its agent.(2) For the purposes of paragraph (1), a Secured Partydoes not have possession of Collateralthat is in the actual or apparent possession or control of the Debtoror the Debtor'sagent.
Article 14 - Perfection: Goods in possession of Bailee(1) A
Security Interestin Goodsin the possession of a Baileemay be perfected by:(A) the Bailee'sattorning to the Secured Party;(B) the issue of a Document of Titleby the Baileein the name of the Secured Party, provided that the Baileeis acting within its express or ostensible authority when issuing that Document of Title;(C) the Secured Partyor its agent being in possession of the negotiable Document of Titleto the Goodswhere the Baileehas issued one; or(D) the filing of a Financing Statementrelating to the Goods.(2) The issue of a negotiable Document of Titlecovering Goodsdoes not preclude any other Security Interestin the from arising. Goods(3) A perfected Security Interestin a negotiable Document of Titlecovering Goodstakes priority over a Security Interestin the Goodsotherwise perfected after the issue of a negotiable Document of Titlecovering those Goods.
Article 15 - Perfection by Control: Investment Property(1) A
Security Interestin Investment Propertymay be perfected by the Secured Partyhaving control of the Collateral.
Certificated Security(2) A
Secured Partyhas control of a Certificated Securityin:(A) bearer form, if the Secured Partyhas possession of the certificate;(B) in registered form, if the Secured Party:(1) takes delivery of the certificate appropriately endorsed; or(2) is registered with the issuer as the registered holder.(3) For the purposes of paragraph (2)(B)(1), a Certificated Securityis appropriately endorsed if it is:(A) endorsed to the Secured Partyor in blank by the Debtor'ssignature; or(B) accompanied by a transfer form signed by the Debtor and made out to the Secured Partyor in blank.
Uncertificated Security(4) A
Secured Partyhas control of an Uncertificated Securityif:(A) the Uncertificated Securityis delivered to the Secured Party; or(B) the issuer has agreed that it will comply with instructions originated by the purchaser without further consent by the registered owner.
Security Entitlement(5) A
Secured Partyhas control of a Security Entitlementif:(A) the Secured Partybecomes the Entitlement Holder;(B) the Securities Intermediaryhas entered into a written control agreement with the Secured Partyor the Secured Partyis otherwise entitled to dispose of the Security Entitlementor direct the Securities Intermediaryhow it should be dealt with; or(C) another Personhas control of the Security Entitlementon behalf of the Secured Partyor, having previously acquired control of it, acknowledges that he has control on behalf of the Secured Party.(6) For the purpose of paragraph (5)(B), a Securities Intermediaryenters into a written control agreement with a Secured Partyif, with the consent of the Entitlement Holder, it agrees in writing with the Secured Partyto comply with the Secured Party'sinstructions directing the transfer or redemption of the Personal Propertyin question without further consent from the Entitlement Holder, whether or not the Entitlement Holderretains the right to deal with the Security Entitlement.(7) A Securities Intermediaryis not required to enter into a written control agreement with a Secured Partyeven if the Debtordirects it to do so. A Securities Intermediarywho has entered into a written control agreement must confirm the existence of such agreement to another Personif required to do so by the Entitlement Holder.(8) If a Security Interestin a Security Entitlementis granted by an Entitlement Holderto the Entitlement Holder's Securities Intermediary, the Securities Intermediaryhas control of the Security Entitlement.
Commodity Contract(9) A
Secured Partyhas control of a Commodity Contractif the Secured Party, the Commodity Customerand the Commodity Intermediaryhave agreed that the Commodity Intermediarywill apply any value distributed on account of the Commodity Contractas directed by the Secured Partywithout further consent by the Commodity Customer.(10) If a Security Interestin a Commodity Contractis granted by a Commodity Customerto the Commodity Customer'sown Commodity Intermediary, the Commodity Intermediaryhas control of the Commodity Contract.
Securities Account or Commodities Account(11) A
Secured Partyhas control over a Securities Accountor Commodity Accountif the Secured Partyhas control of all Security Entitlementsor Commodity Contractscarried in a Securities Accountor Commodity Account.
Electronic Chattel Paper(12) A
Secured Partyhas control of Electronic Chattel Paperif the record or records comprising the chattel paper are created, stored and assigned in such a manner that:(1) a single authoritative copy of the record or records exists which is unique, identifiable and, except as otherwise provided in paragraphs (4), (5), and (6), unalterable;(2) the authoritative copy identifies the Secured Partyas the assignee of the record or records;(3) the authoritative copy is communicated to and maintained by the Secured Partyor its designated custodian;(4) copies or revisions that add or change an identified assignee of the authoritative copy can be made only with the participation of the Secured Party;(5) each copy of the authoritative copy and any copy of a copy is readily identifiable as a copy that is not the authoritative copy; and(6) any revision of the authoritative copy is readily identifiable as an authorized or unauthorized revision.
Letter of credit rights(13) A
Secured Partyhas control of a right evidenced by a letter of credit, to the extent of any right to payment or performance of an obligation by the issuer or a nominated person, if the issuer or nominated person has consented to assigning the proceeds of the letter of credit to the Secured Party.
Negotiable instruments not evidenced by a certificate(14) A
Secured Partyhas control of a negotiable instrument that is not evidenced by a certificate if:(A) the instrument is able to be transferred in accordance with the operating rules of a clearing and settlement facility; and(B) there is an agreement in force under which the Secured Party(or a person who has agreed to act on the instructions of the Secured Party) controls the sending of some or all electronic messages or other electronic communications by which the instrument could be transferred.(15) For the purposes of paragraph (14), a Secured Partyhas control of a negotiable instrument even if the registered owner (who might be the grantor) retains the right:(A) to make substitutions for the instrument; or(B) to originate instructions to the issuer; or(C) to otherwise deal with the instrument.
Duration of perfection by control(14) A
Security Interestin Investment Propertyremains perfected by control from the time the Secured Partyobtains control until the Secured Partydoes not have control and, in relation to a Security or a Security Entitlementonly, one of the following occurs:(A) if the Collateralis a Certificated Security, the Debtorhas or acquires possession of the Security Certificate; or(B) if the Collateralis a Security Entitlement, the Debtoris or becomes the Entitlement Holder.
Article 16 - Perfection by Control: Bank Accounts(1) A
Security Interestin a Bank Accountmay be perfected by the Secured Partyhaving control of the Bank Account.(2) A Secured Partyhas control of a Bank Accountif:(A) the Bankitself is the Secured Party;(B) the Debtor, Secured Partyand the Bankhave entered into a written agreement that the Bankwill comply with instructions originated by the Secured Partydirecting disposition of the funds in the Bank Accountwithout further consent by the Debtor; or(C) the Secured Party, with the written agreement of the Bankand the Debtor, becomes the account holder, whether solely or jointly with any other Person(including the Debtor).(3) A Secured Partymay have control under this Article even if the Debtorretains the right to dispose of funds in the Bank Account.(4) A Bankneed not enter into a written control agreement with a Secured Partyeven if the Debtordirects it to do so. A Bankwhich has entered into a written control agreement must confirm the existence of the agreement to another Personif required to do so by the Debtor.
Article 17 - Perfection: additional provisions(1) Perfection of a
Security Interestin a Securities Accountalso perfects a Security Interestin the Security Entitlementscarried in the Securities Account.(2) Perfection of a Security Interestin a Commodity Accountalso perfects a Security Interestin the Commodity Contractscarried in the Commodity Account.(3) Perfection of a Security Interestin Collateralalso perfects a Security Interestin a Supporting Obligationfor the Collateral.
Article 18 - Perfection: Temporary Perfection(1) This Article applies to a
Security Interestperfected by the filing of a Financing Statementwhere the Debtorchanges its name, registered number (if any) or other identifier with the result that a filed Financing Statementbecomes seriously misleading such that the existence of the Security Interestwould not be discovered by a reasonable search under Article 143 of the Companies Regulations(whether or not a search is actually carried out).(2) This Article also applies to a Security Interestin Personal Propertyperfected under Article 13 (Perfection: possession) or in a Certificated Securitywhich a Secured Partydelivers to the Debtorfor the purpose of:(A) sale or exchange; or(B) presentation, collection, enforcement, renewal, or registration of a transfer.(3) This Article also applies to a Security Interestperfected under Article 14 in a negotiable Document of Titleor Goodsheld by a Baileethat are not covered by a negotiable Document of Title, if the Secured Partymakes the Document of Titleor Goodsavailable to the Debtorfor the purpose of:(A) sale or exchange; or(B) loading, unloading, storing, shipping, transhipping, manufacturing, processing, packaging or otherwise dealing with Goodsin a manner preliminary to their sale or exchange.(4) A Security Interestto which this Article applies remains perfected for 20 Business Daysafter the Collateralis made available to the Debtorsave that in the circumstances specified in paragraph (1) the Security Interestremains perfected for 80 Business Days.(5) After the expiry of that period, perfection depends on compliance with the other provisions of these Regulationsrelating to the perfection of a Security Interest.
Article 19 - Perfection: Proceeds(1) Subject as otherwise provided in these
Regulations, if Collateralis dealt with or otherwise gives rise to Proceeds, the Security Interest:(A) continues in the Collateral, unless the Secured Partyauthorises the dealing free of the Security Interest(whether expressly or impliedly); and(B) attaches to the Proceeds.(2) A Security Interestin Proceedsis continuously perfected if the Security Interestin the original Collateralis perfected by the filing of a Financing Statementwhich:(A) contains a description of the Proceedsthat would be sufficient to perfect a Security Interestin original Collateralof the same kind;(B) covers the original Collateral, if the Proceedsare of a kind that are within the description of the original Collateral; or(C) covers the original Collateral, if the Proceedsconsist of Money, cheques, deposits in or Moneycredited to a Bank Account, or insurance payments.(3) If the Security Interestin the original Collateralis perfected in a manner other than a manner described in paragraph (2), the Security Interestin the Proceedsis a perfected Security Interestand remains perfected for 20 Business Daysafter the Security Interestin the original Collateralattaches to the Proceeds.(4) After the expiry of the period in paragraph (3), the Security Interestin the Proceedsis subject to the provisions of these Regulationsrelating to the perfection of a Security Interestin original Collateralof the same kind as the Proceeds.
Article 20 - Temporary perfection of Personal Property brought into the QFC
Security Interestover Personal Propertywhich is perfected under the law of the jurisdiction in which the Personal Propertyis located when the Security Interestattaches ("the first jurisdiction") and before the Personal Propertyis brought into the QFCwill remain perfected for the purposes of these Regulationsif it is perfected in accordance with these Regulations:(A) not later than 20 Business Daysafter the day on which the Personal Propertyis brought into the QFC; or(B) before perfection ceases under the law of the first jurisdiction,
whichever is earlier.
Article 21 - Goods returned or repossessed(1) Where a
Debtorsells or leases Goodswhich are subject to a Security Interestin circumstances in which the purchaser or lessee takes free of the Security Interestin accordance with Article 19(1)(A) or Article 23, the Security Interestreattaches to the Goodsif:(A) the Goodsare returned to, seized or repossessed by the Debtor; and(B) the obligation secured by that Security Interestremains unpaid or unperformed.(2) Where a Security Interestreattaches under paragraph (1), the time of perfection of the Security Interestis determined as if the Goodshad not been sold or leased, if:(A) the Security Interestwas perfected by the filing of a Financing Statement, at the time of the sale or lease; and(B) the filing is effective at the time of the return, seizure or repossession.(3) Where a sale or lease of Goodscreates an Accountor Chattel Paperand:(A) the Accountor Chattel Paperis transferred to another party; and(B) the Goodsare returned to, seized or repossessed by the Debtor,the transferee of the Accountor Chattel Paperhas a Security Interestin the Goodswhich attaches when the Goodsare returned, seized or repossessed.
Article 22 - Continuity of perfection
Security Interestis continuously perfected if it is:(A) originally perfected; and(B) later perfected in another way,
without an intermediate period when it is unperfected.