NMSA 55-12A-303. Security interest unperfected before January 1, 2024

55-12A-303. Security interest unperfected before January 1, 2024. A security interest that is enforceable immediately before January 1, 2024 but is unperfected at that time: (1) remains an enforceable security interest until the adjustment date; (2) remains enforceable thereafter if the security interest becomes enforceable pursuant to Section 55-9-203 NMSA 1978, as amended by this 2023 act, on January 1, 2024 or before the adjustment date; and (3) becomes perfected: (A) without further action on January 1, 2024 if the requirements for perfection pursuant to this 2023 act are satisfied before or at that time; or (B) when the requirements for perfection are satisfied if the requirements are satisfied after that time. History: 1978 Comp., § 55-12A-303, enacted by Laws 2023, ch. 142, § 108. OFFICIAL COMMENTS UCC Official Comments © by ALI & the NCCUSL. Reproduced with permission of the PEB for the UCC. All rights reserved. 1. Source. This Section derives from Section 9-704. 2. Pre-effective-date enforceable but unperfected security interests. This section deals with security interests that are enforceable but unperfected (i.e., subordinate to the rights of a person who becomes a lien creditor) under pre-2022 Article 9 or other applicable law immediately before this act takes effect. These security interests remain enforceable until the adjustment date, and thereafter if the appropriate steps for attachment under 2022 Article 9 are taken before the adjustment date. See Section A-304(c) (This section’s treatment of enforceability is the same as that of Section A-302.) The security interest becomes a perfected security interest on the effective date if, at that time, the security interest satisfies the requirements for perfection (which include the requirements for attachment) under 2022 Article 9. If the security interest does not satisfy the requirements for perfection until sometime thereafter, it becomes a perfected security interest at that later time. Example 1: Prior to the effective date Debtor obtained a loan from Secured Party and signed a security agreement covering "all cryptocurrencies now owned or hereafter acquired." The security interest attached to various cryptocurrencies owned by Debtor, including 1,000 happicoins held by debtor on the happicoins blockchain platform. Debtor then transferred the 1,000 happicoins to Secured Party on the blockchain. Although the happicoins are general intangibles, Secured Party failed to file a financing statement necessary to perfect its security interest under pre-2022 Article 9. Under 2022 Article 9, the happicoins would be controllable electronic records and the transfer of the happicoins to Secured Party would give Secured Party "control" of the happicoins as provided in Section 12-105. Before 2022 Article 9 (i.e., including 2022 Sections 9-107A and 9-314) and Article 12 became effective, Secured Party’s security interest was unperfected as noted above. Upon the effective date, however, the security interest became perfected by control as a result of the pre-effective-date transfer of control to Secured Party. Example 2: Prior to the effective date Debtor obtained a loan from Secured Party and signed a security agreement covering certain specified deposit accounts and "all documents and chattel paper now owned or hereafter acquired by Debtor." The security interest attached to the deposit accounts and to various documents and chattel paper owned by Debtor. Persons in control of certain electronic chattel paper, electronic documents, and deposit accounts included in the collateral acknowledged that they had control of that collateral on behalf of Secured Party. Assuming that an agency relationship cannot be established between these acknowledging persons and Secured Party, it is perhaps arguable that Secured Party’s security interest in the relevant collateral was unperfected because Secured Party did not have control under pre-2022 Sections 7-106, 9-104, and 9-105. However, because the pre-effective-date acknowledgments would give Secured Party control under the relevant 2022 sections, its security interest, even if not perfected pre-effective date, became perfected by control on the effective date.