2023 New York Laws › UCC - Uniform Commercial Code › Article 9 - Secured Transactions › Part 3 - Perfection and Priority › Sub Part 2 - Perfection › 9-313 - When Possession by or Delivery to Secured Party Perfects Security Interest Without Filing.

Section 9--313. When Possession by or Delivery to Secured Party Perfects
Security Interest Without Filing.
(a) Perfection by possession or delivery. Except as otherwise provided
in  subsection  (b),  a secured party may perfect a security interest in
tangible negotiable documents, goods, instruments,  money,  or  tangible
chattel  paper  by  taking possession of the collateral. A secured party
may perfect a security interest in  certificated  securities  by  taking
delivery of the certificated securities under Section 8--301.
(b) Goods  covered  by  certificate  of  title.  With respect to goods
covered by a certificate of title issued by this state, a secured  party
may perfect a security interest in the goods by taking possession of the
goods only in the circumstances described in Section 9--316(d).
(c) Collateral in possession of person other than debtor. With respect
to  collateral other than certificated securities and goods covered by a
document,  a  secured  party  takes  possession  of  collateral  in  the
possession  of  a  person other than the debtor, the secured party, or a
lessee of the collateral from the debtor in the ordinary course  of  the
debtor's business, when:
(1) the person in possession authenticates a record acknowledging
that  it  holds  possession of the collateral for the secured
party's benefit; or
(2) the person takes possession of the  collateral  after  having
authenticated  a  record  acknowledging  that  it  will  hold
possession of collateral for the secured party's benefit.
(d) Time of perfection by possession; continuation of  perfection.  If
perfection  of  a  security  interest  depends  upon  possession  of the
collateral by a secured party, perfection occurs  no  earlier  than  the
time  the  secured  party  takes possession and continues only while the
secured party retains possession.
(e) Time of perfection by  delivery;  continuation  of  perfection.  A
security  interest  in  a  certificated  security  in registered form is
perfected by delivery when delivery of the certificated security  occurs
under  Section 8--301 and remains perfected by delivery until the debtor
obtains possession of the security certificate.
(f) Acknowledgment not required. A person in possession of  collateral
is  not  required  to acknowledge that it holds possession for a secured
party's benefit.
(g) Effectiveness of acknowledgment; no duties or confirmation.  If  a
person  acknowledges  that  it  holds possession for the secured party's
benefit:
(1) the acknowledgment  is  effective  under  subsection  (c)  or
Section  8--301(a),  even  if the acknowledgment violates the
rights of a debtor; and
(2) unless the person otherwise agrees or  law  other  than  this
article  otherwise provides, the person does not owe any duty
to the secured party and  is  not  required  to  confirm  the
acknowledgment to another person.
(h) Secured  party's  delivery  to person other than debtor. A secured
party having possession of collateral does not relinquish possession  by
delivering  the collateral to a person other than the debtor or a lessee
of the collateral from the debtor in the ordinary course of the debtor's
business if  the  person  was  instructed  before  the  delivery  or  is
instructed contemporaneously with the delivery:
(1) to  hold possession of the collateral for the secured party's
benefit; or
(2) to redeliver the collateral to the secured party.
(i) Effect  of  delivery  under   subsection   (h);   no   duties   or
confirmation.  A secured party does not relinquish possession, even if a

delivery  under subsection (h) violates the rights of a debtor. A person
to which collateral is delivered under subsection (h) does not  owe  any
duty to the secured party and is not required to confirm the delivery to
another person unless the person otherwise agrees or law other than this
article otherwise provides.
(j) Cooperative interests. Subsections (a) through (i) do not apply to
cooperative interests.