Quebec Proposes Cash Collateral Provisions And Modifications To Security Agent Provision

On November 26, 2014, the Quebec Minister of Finance presented Bill 28 to the National Assembly. The proposed legislation includes provisions in respect of cash collateral as well as modifications to the provision for security in favour of a security agent. Once the bill is adopted, the cash collateral provisions are proposed to come into effect on a later date determined by the Quebec government. The basic conceptual building block for cash collateral is the notion of control similar to that applicable to granting a first priority security over security entitlements. The provisions also compare favorably in important respects to the security-interest regime applicable to deposit accounts under Article 9 of the Uniform Commercial Code. We will be posting, in the next little while, further discussion in respect of the cash collateral provisions.