As previously reported in
our post of November 28, 2014, the Quebec
Minister of Finance presented
Bill 28 to the National Assembly on November
26, 2014. The proposed legislation includes provisions in respect
of cash collateral, and would make Quebec the first Canadian
province to propose legislative modifications in order to
facilitate cash collateral. The purpose of this post is to provide
some background as to the necessity of these new provisions as well
as an overview of the specific rules before proceeding to give
examples of application.
Background
Historically, it has been a challenge for Canadian entities to
offer a first priority security interest on cash to their
counterparties. By contrast, in the United States, a debtor may
grant a first priority security interest over cash in a deposit
account by way of control pursuant to the provisions of Article 9
of the Uniform Commercial Code. The same is not currently the case
in Canada for cash not in a
