• Part 3: Part 3: Perfection

    • Article 11 - Perfection of Security Interest

      (1) Subject to Article 12, a Security Interest in particular Collateral is perfected when:
      (A) the Security Interest is enforceable against third parties; and
      (B) one of the following applies:
      (i) a Financing Statement is filed ;
      (ii) the Secured Party has possession of the Collateral (other than possession as a result of seizure or repossession);
      (iii) in the case of Investment Property and Bank Accounts, the Secured Party has control of the Collateral; and
      (C) the requirements (if any) for perfection referred to in Articles 13 to 21 have been satisfied,
      regardless of the order of occurrence.

    • Article 12 - Security interests perfected upon attachment

      The following Security Interests are perfected when they attach:

      (A) an assignment of receivables;
      (B) a Security Interest created by a Securities Intermediary in Investment Property;
      (C) a Security Interest in a Commodity Contract or a Commodity Account created by a Commodity Intermediary;
      (D) a Security Interest in Financial Collateral.

    • Article 13 - Perfection: possession

      (1) A Security Interest in:
      (A) Goods;
      (B) an Instrument;
      (C) a negotiable Document of Title;
      (D) Money; or
      (E) Chattel Paper
      may be perfected by possession of the Collateral by the Secured Party or its agent.
      (2) For the purposes of paragraph (1), a Secured Party does not have possession of Collateral that is in the actual or apparent possession or control of the Debtor or the Debtor's agent.

    • Article 14 - Perfection: Goods in possession of Bailee

      (1) A Security Interest in Goods in the possession of a Bailee may be perfected by:
      (A) the Bailee's attorning to the Secured Party;
      (B) the issue of a Document of Title by the Bailee in the name of the Secured Party, provided that the Bailee is acting within its express or ostensible authority when issuing that Document of Title;
      (C) the Secured Party or its agent being in possession of the negotiable Document of Title to the Goods where the Bailee has issued one; or
      (D) the filing of a Financing Statement relating to the Goods.
      (2) The issue of a negotiable Document of Title covering Goods does not preclude any other Security Interest in the Goods from arising.
      (3) A perfected Security Interest in a negotiable Document of Title covering Goods takes priority over a Security Interest in the Goods otherwise perfected after the issue of a negotiable Document of Title covering those Goods.

    • Article 15 - Perfection by Control: Investment Property

      (1) A Security Interest in Investment Property may be perfected by the Secured Party having control of the Collateral.

      Certificated Security

      (2) A Secured Party has control of a Certificated Security in:
      (A) bearer form, if the Secured Party has 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 Security is appropriately endorsed if it is:
      (A) endorsed to the Secured Party or in blank by the Debtor's signature; or
      (B) accompanied by a transfer form signed by the Debtor and made out to the Secured Party or in blank.

      Uncertificated Security

      (4) A Secured Party has control of an Uncertificated Security if:
      (A) the Uncertificated Security is 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 Party has control of a Security Entitlement if:
      (A) the Secured Party becomes the Entitlement Holder;
      (B) the Securities Intermediary has entered into a written control agreement with the Secured Party or the Secured Party is otherwise entitled to dispose of the Security Entitlement or direct the Securities Intermediary how it should be dealt with; or
      (C) another Person has control of the Security Entitlement on behalf of the Secured Party or, 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 Intermediary enters into a written control agreement with a Secured Party if, with the consent of the Entitlement Holder, it agrees in writing with the Secured Party to comply with the Secured Party's instructions directing the transfer or redemption of the Personal Property in question without further consent from the Entitlement Holder, whether or not the Entitlement Holder retains the right to deal with the Security Entitlement.
      (7) A Securities Intermediary is not required to enter into a written control agreement with a Secured Party even if the Debtor directs it to do so. A Securities Intermediary who has entered into a written control agreement must confirm the existence of such agreement to another Person if required to do so by the Entitlement Holder.
      (8) If a Security Interest in a Security Entitlement is granted by an Entitlement Holder to the Entitlement Holder's Securities Intermediary, the Securities Intermediary has control of the Security Entitlement.

      Commodity Contract

      (9) A Secured Party has control of a Commodity Contract if the Secured Party, the Commodity Customer and the Commodity Intermediary have agreed that the Commodity Intermediary will apply any value distributed on account of the Commodity Contract as directed by the Secured Party without further consent by the Commodity Customer.
      (10) If a Security Interest in a Commodity Contract is granted by a Commodity Customer to the Commodity Customer's own Commodity Intermediary, the Commodity Intermediary has control of the Commodity Contract.

      Securities Account or Commodities Account

      (11) A Secured Party has control over a Securities Account or Commodity Account if the Secured Party has control of all Security Entitlements or Commodity Contracts carried in a Securities Account or Commodity Account.

      Electronic Chattel Paper

      (12) A Secured Party has control of Electronic Chattel Paper if 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 Party as the assignee of the record or records;
      (3) the authoritative copy is communicated to and maintained by the Secured Party or 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 Party has 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 Party has 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 Party has 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 Interest in Investment Property remains perfected by control from the time the Secured Party obtains control until the Secured Party does not have control and, in relation to a Security or a Security Entitlement only, one of the following occurs:
      (A) if the Collateral is a Certificated Security, the Debtor has or acquires possession of the Security Certificate; or
      (B) if the Collateral is a Security Entitlement, the Debtor is or becomes the Entitlement Holder.

    • Article 16 - Perfection by Control: Bank Accounts

      (1) A Security Interest in a Bank Account may be perfected by the Secured Party having control of the Bank Account.
      (2) A Secured Party has control of a Bank Account if:
      (A) the Bank itself is the Secured Party;
      (B) the Debtor, Secured Party and the Bank have entered into a written agreement that the Bank will comply with instructions originated by the Secured Party directing disposition of the funds in the Bank Account without further consent by the Debtor; or
      (C) the Secured Party, with the written agreement of the Bank and the Debtor, becomes the account holder, whether solely or jointly with any other Person (including the Debtor).
      (3) A Secured Party may have control under this Article even if the Debtor retains the right to dispose of funds in the Bank Account.
      (4) A Bank need not enter into a written control agreement with a Secured Party even if the Debtor directs it to do so. A Bank which has entered into a written control agreement must confirm the existence of the agreement to another Person if required to do so by the Debtor.

    • Article 17 - Perfection: additional provisions

      (1) Perfection of a Security Interest in a Securities Account also perfects a Security Interest in the Security Entitlements carried in the Securities Account.
      (2) Perfection of a Security Interest in a Commodity Account also perfects a Security Interest in the Commodity Contracts carried in the Commodity Account.
      (3) Perfection of a Security Interest in Collateral also perfects a Security Interest in a Supporting Obligation for the Collateral.

    • Article 18 - Perfection: Temporary Perfection

      (1) This Article applies to a Security Interest perfected by the filing of a Financing Statement where the Debtor changes its name, registered number (if any) or other identifier with the result that a filed Financing Statement becomes seriously misleading such that the existence of the Security Interest would 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 Interest in Personal Property perfected under Article 13 (Perfection: possession) or in a Certificated Security which a Secured Party delivers to the Debtor for 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 Interest perfected under Article 14 in a negotiable Document of Title or Goods held by a Bailee that are not covered by a negotiable Document of Title, if the Secured Party makes the Document of Title or Goods available to the Debtor for the purpose of:
      (A) sale or exchange; or
      (B) loading, unloading, storing, shipping, transhipping, manufacturing, processing, packaging or otherwise dealing with Goods in a manner preliminary to their sale or exchange.
      (4) A Security Interest to which this Article applies remains perfected for 20 Business Days after the Collateral is made available to the Debtor save that in the circumstances specified in paragraph (1) the Security Interest remains perfected for 80 Business Days.
      (5) After the expiry of that period, perfection depends on compliance with the other provisions of these Regulations relating to the perfection of a Security Interest.

    • Article 19 - Perfection: Proceeds

      (1) Subject as otherwise provided in these Regulations, if Collateral is dealt with or otherwise gives rise to Proceeds, the Security Interest:
      (A) continues in the Collateral, unless the Secured Party authorises the dealing free of the Security Interest (whether expressly or impliedly); and
      (B) attaches to the Proceeds.
      (2) A Security Interest in Proceeds is continuously perfected if the Security Interest in the original Collateral is perfected by the filing of a Financing Statement which:
      (A) contains a description of the Proceeds that would be sufficient to perfect a Security Interest in original Collateral of the same kind;
      (B) covers the original Collateral, if the Proceeds are of a kind that are within the description of the original Collateral; or
      (C) covers the original Collateral, if the Proceeds consist of Money, cheques, deposits in or Money credited to a Bank Account, or insurance payments.
      (3) If the Security Interest in the original Collateral is perfected in a manner other than a manner described in paragraph (2), the Security Interest in the Proceeds is a perfected Security Interest and remains perfected for 20 Business Days after the Security Interest in the original Collateral attaches to the Proceeds.
      (4) After the expiry of the period in paragraph (3), the Security Interest in the Proceeds is subject to the provisions of these Regulations relating to the perfection of a Security Interest in original Collateral of the same kind as the Proceeds.

    • Article 20 - Temporary perfection of Personal Property brought into the QFC

      A Security Interest over Personal Property which is perfected under the law of the jurisdiction in which the Personal Property is located when the Security Interest attaches ("the first jurisdiction") and before the Personal Property is brought into the QFC will remain perfected for the purposes of these Regulations if it is perfected in accordance with these Regulations:

      (A) not later than 20 Business Days after the day on which the Personal Property is 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 Debtor sells or leases Goods which are subject to a Security Interest in circumstances in which the purchaser or lessee takes free of the Security Interest in accordance with Article 19(1)(A) or Article 23, the Security Interest reattaches to the Goods if:
      (A) the Goods are returned to, seized or repossessed by the Debtor; and
      (B) the obligation secured by that Security Interest remains unpaid or unperformed.
      (2) Where a Security Interest reattaches under paragraph (1), the time of perfection of the Security Interest is determined as if the Goods had not been sold or leased, if:
      (A) the Security Interest was 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 Goods creates an Account or Chattel Paper and:
      (A) the Account or Chattel Paper is transferred to another party; and
      (B) the Goods are returned to, seized or repossessed by the Debtor,
      the transferee of the Account or Chattel Paper has a Security Interest in the Goods which attaches when the Goods are returned, seized or repossessed.

    • Article 22 - Continuity of perfection

      A Security Interest is continuously perfected if it is:

      (A) originally perfected; and
      (B) later perfected in another way,

      without an intermediate period when it is unperfected.