Document ID: chunk:federal_register_of_legislation:C2013C00609:clause:2_322
Version: federal_register_of_legislation:C2013C00609
Segment Type: clause
Provision Reference: sch 2 cl 322
Character Range: 143460–146007

322  Perfection rule

Main rule
 (1) A transitional security interest in collateral is perfected from immediately before the registration commencement time, whether the security interest arises before, at or after the registration commencement time (including a transitional security interest that arises after the end of the month that is 24 months after the registration commencement time).
Note 1: As a result of this subsection, the priority time for a transitional security interest under subsection 55(4) will be immediately before the registration commencement time, as long as the security interest remains continuously perfected.
Note 2: See section 320 for a general summary of priority rules as they affect transitional security interests.
 (2) However, the transitional security interest stops being perfected under subsection (1) at the earliest of the following times:
 (a) when the security interest is perfected by registration under Division 6 (migration of personal property interests);
 (b) when the security interest is perfected by preparatory registration under Division 7;
 (c) when a registration under Division 6 or 7 is amended so that the registration perfects the security interest;
 (d) when the security interest is otherwise perfected by registration, or is perfected by possession or control;
 (e) when the security interest is otherwise perfected (but not temporarily perfected) by this Act, other than under this section;
 (f) the end of the month that is 24 months after the registration commencement time.
Note: In the case of a transitional security interest in collateral that does not arise until after the end of the month that is 24 months after the registration commencement time, this section has the same effect as for other transitional security interests. In particular:
(a) if a financing statement describing the collateral is registered before the end of that month, by the operation of sections 21, 55, 321 and this section, the security interest is continuously perfected from the registration time for the collateral until the registration stops being effective; and
(b) if the security interest is not perfected (otherwise than under this section) at the end of the month that is 24 months after the registration commencement time, the security interest will become unperfected at that time.

Exception
 (3) Subsections (1) and (2) do not apply to a transitional security interest in collateral if the interest is of a class prescribed by regulations made for the purposes of this subsection.