§ 9-316 — Effect of Change in Governing Law

New York § 9-316

• Jurisdiction: New York
• Law UCC: Uniform Commercial Code
• Part 3: Perfection and Priority
• Subpart 2: Perfection
• Art. 9: Secured Transactions

Text

Section 9--316. Effect of Change in Governing Law.\n * (a) General rule: effect on perfection of change in governing law. A\nsecurity interest perfected pursuant to the law of the jurisdiction\ndesignated in Section 9--301(a) or 9--305(c) remains perfected until the\nearliest of:\n (1) the time perfection would have ceased under the law of that\n jurisdiction;\n (2) the expiration of four months after a change of the debtor's\n location to another jurisdiction; or\n (3) the expiration of one year after a transfer of collateral to\n a person that thereby becomes a debtor and is located in\n another jurisdiction.\n * NB Effective until June 3, 2026\n* (a) General rule: effect on perfection of change in governing law. A\nsecurity interest perfected pursuant to the law of the jurisdiction\ndesignated in Section 9--301(a), 9--305(c), 9-306A(d), or 9-306B(b)\nremains perfected until the earliest of:\n (1) the time perfection would have ceased under the law of that\n jurisdiction;\n (2) the expiration of four months after a change of the debtor's\n location to another jurisdiction; or\n (3) the expiration of one year after a transfer of collateral to\n a person that thereby becomes a debtor and is located in\n another jurisdiction.\n * NB Effective June 3, 2026\n (b) Security interest perfected or unperfected under law of new\njurisdiction. If a security interest described in subsection (a) becomes\nperfected under the law of the other jurisdiction before the earliest\ntime or event described in that subsection, it remains perfected\nthereafter. If the security interest does not become perfected under the\nlaw of the other jurisdiction before the earliest time or event, it\nbecomes unperfected and is deemed never to have been perfected as\nagainst a purchaser of the collateral for value.\n (c) Possessory security interest in collateral moved to new\njurisdiction. A possessory security interest in collateral, other than\ngoods covered by a certificate of title and as-extracted collateral\nconsisting of goods, remains continuously perfected if:\n (1) the collateral is located in one jurisdiction and subject to\n a security interest perfected under the law of that\n jurisdiction;\n (2) thereafter the collateral is brought into another\n jurisdiction; and\n (3) upon entry into the other jurisdiction, the security interest\n is perfected under the law of the other jurisdiction.\n (d) Goods covered by certificate of title from this state. Except as\notherwise provided in subsection (e), a security interest in goods\ncovered by a certificate of title which is perfected by any method under\nthe law of another jurisdiction when the goods become covered by a\ncertificate of title from this state remains perfected until the\nsecurity interest would have become unperfected under the law of the\nother jurisdiction had the goods not become so covered.\n (e) When subsection (d) security interest becomes unperfected against\npurchasers. A security interest described in subsection (d) becomes\nunperfected as against a purchaser of the goods for value and is deemed\nnever to have been perfected as against a purchaser of the goods for\nvalue if the applicable requirements for perfection under Section\n9--311(b) or 9--313 are not satisfied before the earlier of:\n (1) the time the security interest would have become unperfected\n under the law of the other jurisdiction had the goods not\n become covered by a certificate of title from this state; or\n (2) the expiration of four months after the goods had become so\n covered.\n * (f) Change in jurisdiction of bank, issuer, nominated person,\nsecurities intermediary, or commodity intermediary. A security interest\nin deposit accounts, letter-of-credit rights, or investment property\nwhich is perfected under the law of the bank's jurisdiction, the\nissuer's jurisdiction, a nominated person's jurisdiction, the securities\nintermediary's jurisdiction, or the commodity intermediary's\njurisdiction, as applicable, remains perfected until the earlier of:\n (1) the time the security interest would have become unperfected\n under the law of that jurisdiction; or\n (2) the expiration of four months after a change of the\n applicable jurisdiction to another jurisdiction.\n * NB Effective until June 3, 2026\n* (f) Change in jurisdiction of chattel paper, controllable electronic\nrecord, bank, issuer, nominated person, securities intermediary, or\ncommodity intermediary. A security interest in chattel paper,\ncontrollable accounts, controllable electronic records, controllable\npayment intangibles, deposit accounts, letter-of-credit rights, or\ninvestment property which is perfected under the law of the chattel\npaper's jurisdiction, the controllable electronic record's jurisdiction,\nthe bank's jurisdiction, the issuer's jurisdiction, a nominated person's\njurisdiction, the securities intermediary's jurisdiction, or the\ncommodity intermediary's jurisdiction, as applicable, remains perfected\nuntil the earlier of:\n (1) the time the security interest would have become unperfected\n under the law of that jurisdiction; or\n (2) the expiration of four months after a change of the\n applicable jurisdiction to another jurisdiction.\n * NB Effective June 3, 2026\n (g) Subsection (f) security interest perfected or unperfected under\nlaw of new jurisdiction. If a security interest described in subsection\n(f) becomes perfected under the law of the other jurisdiction before the\nearlier of the time or the end of the period described in that\nsubsection, it remains perfected thereafter. If the security interest\ndoes not become perfected under the law of the other jurisdiction before\nthe earlier of that time or the end of that period, it becomes\nunperfected and is deemed never to have been perfected as against a\npurchaser of the collateral for value.\n (h) Effect on filed financing statement of change in governing law.\nThe following rules apply to collateral to which a security interest\nattaches within four months after the debtor changes its location to\nanother jurisdiction:\n (1) A financing statement filed before the change pursuant to the\n law of the jurisdiction designated in Section 9--301(a) or\n 9--305(c) is effective to perfect a security interest in the\n collateral if the financing statement would have been\n effective to perfect a security interest in the collateral\n had the debtor not changed its location.\n (2) If a security interest perfected by a financing statement\n that is effective under paragraph (1) becomes perfected under\n the law of the other jurisdiction before the earlier of the\n time the financing statement would have become ineffective\n under the law of the jurisdiction designated in Section\n 9--301(a) or 9--305(c) or the expiration of the four-month\n period, it remains perfected thereafter. If the security\n interest does not become perfected under the law of the other\n jurisdiction before the earlier time or event, it becomes\n unperfected and is deemed never to have been perfected as\n against a purchaser of the collateral for value.\n (i) Effect of change in governing law on financing statement filed\nagainst original debtor. If a financing statement naming an original\ndebtor is filed pursuant to the law of the jurisdiction designated in\nSection 9--301(a) or 9--305(c) and the new debtor is located in another\njurisdiction, the following rules apply:\n (1) The financing statement is effective to perfect a security\n interest in collateral in which the new debtor has or\n acquires rights before or within four months after the new\n debtor becomes bound under Section 9--203(d), if the\n financing statement would have been effective to perfect a\n security interest in the collateral had the collateral been\n acquired by the original debtor.\n (2) A security interest that is perfected by the financing\n statement and which becomes perfected under the law of the\n other jurisdiction before the earlier of the expiration of\n the four month period or the time the financing statement\n would have become ineffective under the law of the\n jurisdiction designated in Section 9--301(a) or 9--305(c)\n remains perfected thereafter. A security interest that is\n perfected by the financing statement but which does not\n become perfected under the law of the other jurisdiction\n before the earlier time or event becomes unperfected and is\n deemed never to have been perfected as against a purchaser of\n the collateral for value.\n