Cash Collateral – Promised changes to the Ontario PPSA will facilitate taking cash as security
|Area||Banking and Finance Law|
Currently, a security interest in a deposit account is perfected by filing a financing statement under the Ontario Personal Property Security Act (“PPSA”). This can create a challenge for lenders and swap counterparties as there is no way to take priority over creditors with pre-existing registrations without asking those creditors for releases or estoppels. This in turn may create significant delay for those lenders and swap counterparties who need to take security over cash collateral quickly.