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Overview
As of today, the Uniform Law Commission’s 2022 Amendments to the official text of the Uniform Commercial Code (UCC) have been enacted in North Dakota and introduced in the legislatures of twenty-two other U.S. jurisdictions.
The Amendments apply the UCC's concepts and rules, originally written for paper-based commercial transactions, to transactions involving electronic records. An important consequence of this is the creation, in new UCC Article 12, of a new type of intangible property, the "controllable electronic record," which has ramifications for UCC Articles 7, 8 and 9 and beyond.
A controllable electronic record is an intangible capable of being controlled and transferred by an identifiable person, without the need to file a UCC financing statement ordinarily required to perfect transfer of an intangible.
Of critical importance, new Article 12 sets forth the conditions by which a purchaser of control of a controllable electronic record may obtain rights equivalent to those of a holder in due course of a negotiable instrument. Such a purchaser (a “qualifying purchaser”) need not perfect its rights by filing a financing statement and takes free of adverse interests evidenced by prior UCC filings.
When widely enacted in the U.S., these rules will open the door to new forms of electronic trade finance and have ramifications for dealings with all digital tokens. States that fail to enact the amendments potentially will be left at a serious disadvantage.
Faculty will present the first of several Briefings concerning the entirety of the 2022 Amendments. The first Briefing will focus on new Article 12 and the creation of controllable electronic records, controllable accounts and controllable payment intangibles.
The first Briefing will cover the following topics:
- Background of the UCC 2022 Amendments (10 minutes)
- Evolution of rules governing transfer of electronic or digital notes and title documents (10 minutes)
- Article 12 definition of controllable electronic records, controllable accounts and controllable payment intangibles and rules for obtaining control (20 minutes)
- Consequences of control and rights of persons adverse to a qualifying purchaser (20 minutes)
Who Should Attend: Outside counsel, in-house attorneys, and industry professionals involved in sales and financing transactions governed by the UCC, and transactions involving transfers of all forms of digital assets, including cryptocurrency, NFTs and other digital tokens
Program Level: Update
Prerequisites: None
Advanced Preparation: None
Faculty:
Alan Kolod
Moses & Singer LLP
Eric P. Marcus (Retired)
Arnold & Porter Kaye Scholer LLP
William A. Tanenbaum
Moses & Singer LLP