Agreement Control

The new “control” method for developing security interests in investment properties and the adoption of new rules for prioritizing insured, controlled-sophisticated creditors and those who simply registered against the deposit dictate good securities collateral practices. As can be inferred from the new priority rules, control is not necessarily an exclusive regime. For certain types of real estate assets, such as accounting securities. B, more than one secured creditor (as well as the securities intermediary) may have control of the same securities. Although the terminology used in the PPSA has changed slightly, the STA has not significantly changed the rules for guaranteed operations in the direct storage system. The main changes relate to the indirect participation system, in which the guaranteed parties can restore their security through a tripartite “control agreement” between the securities intermediary, the insured party and the pawnbroker. For different types of real estate, control means different things. In the case of a certified warranty, the check requires the approval and possession of the certificate, with the exception of a certificate to the bearer. For book-based securities, control consists of transferring the securities to an account belonging to the secured creditor or, more generally, by entering into a tripartite “control agreement” between the pledge, the securities intermediary who holds the securities based on the account for the pledge and the secured creditor.

In essence, control means that the secured creditor has the right to assign “attribution orders” to the securities intermediary in certain circumstances (for example. B in the event of a late payment by the borrower/pledgee) and the securities intermediary agreed that it would comply with these instructions from the secured creditor without further approval from the borrower/pledgor. An authorization warrant is the ATS`s terminology for an order assigned to a securities brokerage that orders it to transfer or execute a security or security claim. The borrower/Pledgor is prevented from giving instructions to the contrary and the securities intermediary may accept them. For secured creditors, control of securities mortgaged by the new priority rules is essential. In all but a few cases, registration alone will not be sufficient to obtain and maintain priority over other creditors. Under the new regime: (i) a controlling secured creditor has priority over a secured creditor who registers only against the pawnbroker; (ii) a secured creditor who obtains the first control has priority over a secured creditor, who then obtains control; and (iii) the securities intermediary itself (which, in many circumstances, is considered a supervisory authority) has priority over secured creditors.