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. 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. 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. The changes made by the STA and the PPSA have strengthened the security of the law with respect to the seizure of securities and will greatly facilitate and strengthen the use of book-based securities as collateral, which would add value to borrowers and lenders and the market as a whole. However, the new regime has posed new challenges: lenders need to reassess their approach to securities security transactions and borrowers/issuers need to understand how best to respond to new requirements and considerations. 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. The changes to the PPSA resulting from the STA introduce several important new concepts and concepts that are not fully advertised in this abbreviated version of the article, with the exception that “Investment Ownership” is now a ppsa clause that defines a new category of security, including securities, securities, securities, securities accounts, futures contracts and futures accounts. As noted above, a control agreement should not grant exclusive control to the insured. In addition, a borrower/Pledgor may retain the right to give (non-confrontational) instructions and other safe parties may at the same time obtain (or already have) the right to issue instructions. In particular, lenders, borrowers and other parties should be aware, prior to this price, of various potential problems related to control agreements and of certain issues related to control agreements and issues related to the negotiation and preparation of control agreements.