Document ID: chunk:federal_register_of_legislation:C2024C00719:section:240
Version: federal_register_of_legislation:C2024C00719
Segment Type: section
Provision Reference: s 240
Character Range: 377995–380617

240  Governing laws—financial property and rights evidenced by letters of credit

Validity rules
 (1) The validity of a security interest in financial property, or property covered by subsection (2), is governed by the law of the jurisdiction (other than the law relating to conflict of laws) in which the grantor is located when the security interest attaches, under that law, to the property.
 (2) This subsection covers property that is a right evidenced by a letter of credit that states that the letter of credit must be presented on claiming payment or requiring the performance of an obligation.
 (3) However, the validity of a security interest to which subsection (1) applies is governed by the law of Australia if:
 (a) the security interest has attached under the law of a place in Australia; and
 (b) at the time of attachment:
 (i) the property is located in Australia; and
 (ii) the secured party has possession or control of the property sufficient to perfect the security interest under this Act.

Perfection rules
 (4) At a particular time, the perfection, and the effect of perfection or non‑perfection, of a security interest in financial property, or property covered by subsection (2), is governed by the law of the jurisdiction (other than the law relating to conflict of laws) in which the grantor is located at that time.
 (5) However, at a particular time, the perfection, and the effect of perfection or non‑perfection, of a security interest mentioned in subsection (4) is governed by the law of Australia if, at that time:
 (a) the property is located in Australia; and
 (b) the secured party has possession or control of the property sufficient to perfect the security interest under this Act.

Non‑negotiable documents of title
 (6) Despite subsections (1) to (5), a security interest in a non‑negotiable document of title is governed by the law of the jurisdiction (other than the law relating to conflict of laws) in which the goods to which the document of title relates are located when the security interest attaches, under that law, to the document of title.

Negotiable instruments not evidenced by a certificate
 (7) Despite subsections (1) to (5), a security interest in a negotiable instrument that is not evidenced by a certificate is governed by the law of the jurisdiction (other than the law relating to conflict of laws) that governs the negotiable instrument.
Note 1: For the priority of a security interests in financial property if there is no foreign register, see section 77.
Note 2: For the location of bodies corporate, bodies politic and individuals, see section 235.