As we noted
last week, an expert panel recommended
important reforms to Ontario’s Personal
Property Security Act (PPSA) as part of a broader
study into modernizing Ontario business law. The panel
proposed amendments to the PPSA permit cash as collateral to be
perfected by control as opposed to registration. The panel
further recommended allowing cash, when perfected by control, to
have priority over competing security interests. These
proposed changes are intended to harmonize the Ontario PPSA with
Revised Article 9 of the Uniform Commercial Code and provisions of
the Civil Code of Quebec
governing security interests.
As our readers know we have been strong advocates for these
changes. They would significantly facilitate the use of cash
as collateral and be of significant benefit to businesses that seek
to use cash collateral to finance their operations, particularly
their financial market participation, such as derivatives
transactions. Priority would not
