Securities Transfer Act Passed By Ontario And Alberta Legislatures, Set To Take Effect Later In ’06

At the end of May 2006, both the Ontario and Alberta legislatures passed the Securities Transfer Act (STA) and consequential amendments to their Personal Property Security Acts (PPSA). These Acts will not be brought into force until late in 2006, by which time a few other provinces might also have introduced or passed this same legislation. Those familiar with the U.S. Uniform Commercial Code Article 8 will find the STA and the PPSA amendments quite familiar.

This legislation is very important to market participants in the derivatives, structured finance and securities financing markets. Among its most important features are the following:

• The PPSA and STA adopt the PRIMA (place of the relevant intermediary) approach to conflict of laws issues including those governing validity, perfection and priority of a security interest in financial assets held through the indirect holding system.