Reduce your risk

There are ways to reduce the risks of secured parties' reliance on US account collateral. When drafting and negotiating deposit account control agreements (DACAs) and securities account control agreements (SACAs), known collectively as ACAs, a number of issues commonly arise. Under the collateral security laws of each State in the US, a security interest in a deposit account must be, and a security interest in a securities account may be, perfected by the secured party obtaining control (within the meaning of Section 9-104/8-106 of the Uniform Commercial Code (UCC), as enacted by each US state in substantially uniform form) over such account. Unless a security interest is perfected by the secured party, the security interest will be subject to the prior rights of (i) a trustee in bankruptcy or a receiver of the debtor or (ii) a creditor that has acquired a lien on the account by attachment, levy or the like.