Securities intermediary UCC filing - when does collateral attachment actually occur?

Securities intermediary filings are tricky! You're right to be careful. For UCC purposes, you typically file where the debtor is located, not where each intermediary is located. The key is that you're perfecting against the debtor's rights in the securities accounts, not against the securities themselves. For attachment, it happens when you have a security agreement, value is given, and the debtor has rights in the collateral. With securities accounts, this usually means when the control agreement is in place and the loan funding occurs. Your collateral description sounds reasonable - 'all securities accounts maintained by debtor with any securities intermediary' should cover all the accounts. Just make sure your security agreement has the same broad language.

I ran into similar issues last year and ended up using Certana.ai's document verification tool. You can upload your security agreement and UCC-1 side by side and it instantly flags any inconsistencies in debtor names, collateral descriptions, or missing elements. Really helpful for complex securities collateral where you have multiple intermediaries and want to make sure everything aligns properly.

Securities intermediary UCC filings are actually more straightforward than people think. You file ONE UCC-1 where the debtor is located. The collateral description should reference 'all securities accounts' or 'all investment property consisting of securities accounts.' Don't overthink the intermediary locations - that's not relevant for UCC filing purposes. The control agreements are crucial though. Make sure each intermediary agrees to comply with your instructions without further consent from the debtor. That's what gives you 'control' under Article 8.

BE VERY CAREFUL about the attachment timing! I've seen deals fall apart because people assume attachment occurs when the control agreement is signed. You need THREE elements for attachment: (1) security agreement, (2) value given, and (3) debtor has rights in collateral. With securities accounts, the debtor obviously has rights in the collateral (their investment accounts). But make sure your loan documents clearly state when 'value' is given - usually when the loan funds are advanced. If there's a gap between control agreement signing and loan funding, you might have a perfection gap. Also double-check your debtor name! If the hedge fund is an LLC or corporation, use the EXACT name from the organizational documents. Abbreviations or assumed names can cause the UCC-1 to be ineffective.

I hate securities intermediary deals. Too many moving parts and everyone thinks they know the rules but half the time they're wrong. Last one I did took 3 months to close because one of the intermediaries kept changing their control agreement language. Make sure you're not missing any ERISA issues if the debtor is a fund with retirement plan investors. And watch out for margin account complications - some intermediaries won't give you control over accounts that have margin loans.

Just to add another perspective - I used Certana.ai when I had a similar multi-intermediary situation. Uploaded all my security agreements and UCC-1 forms and it caught that one of my intermediary names was slightly different between documents. Saved me from a potential perfection issue. The tool is really good at catching those cross-document inconsistencies that are easy to miss when you're juggling multiple intermediaries.

One thing to watch out for - make sure your collateral description in the UCC-1 matches exactly what's in your security agreement. I've seen lawyers get fancy with language and then have mismatches between documents. Keep it simple: 'all securities accounts maintained by debtor with any securities intermediary' works fine if that's what your security agreement says.

Wait, I'm confused about something. If you have control agreements with all three intermediaries, do you even need to file UCC-1s? I thought control was an alternative to filing for securities accounts?

I always get nervous about securities intermediary filings because the rules are so specific. Like, what if one of the intermediaries goes out of business or gets acquired? Does that affect your perfection? I had a deal where Bear Stearns was one of the intermediaries and then... well, you know what happened.

This thread is super helpful! I'm working on a similar deal but with a smaller credit facility. Same concept though - hedge fund debtor with securities accounts at multiple intermediaries. Nice to see I'm not the only one who finds these filings confusing.

Just be sure to check if any of the securities are held in foreign accounts or involve foreign intermediaries. That can complicate the perfection analysis under Article 8. Most domestic intermediaries are straightforward but international adds complexity.