Published — June 14, 2021
The following post does not create a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. It is still best for you to engage the services of your own lawyer to address your legal concerns, if any.
Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
Read also: PERFECTION OF SECURITY INTEREST UNDER PERSONAL PROPERTY SECURITY ACT
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A security interest in a deposit account or investment property may be perfected by control.
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Nothing in the Personal Property Security shall require a deposit-taking institution or an intermediary to enter into a control agreement, even if the grantor so requests.
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A deposit-taking institution or an intermediary that has entered into a control agreement shall not be required to confirm the existence of the agreement to another person unless requested to do so by the grantor.
A security interest may be perfected by control of investment property and deposit account. How then can a security interest in a deposit account or investment property be perfected by control?
Republic Act No. 11057 or Personal Property Security Act provides that:
A security interest in a deposit account or investment property may be perfected by control through:
- The creation of the security interest in favor of the deposit-taking institution or the intermediary;
- The conclusion of a control agreement; or
- For an investment property that is an electronic security not held with an intermediary, the notation of the security interest in the books maintained by or on behalf of the issuer for the purpose of recording the name of the holder of the securities.
Nothing in the Act shall require a deposit-taking institution or an intermediary to enter into a control agreement, even if the grantor so requests. A deposit-taking institution or an intermediary that has entered into such an agreement shall not be required to confirm the existence of the agreement to another person unless requested to do so by the grantor.
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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