(a) A security interest that is enforceable and perfected immediately before January 1, 2024 is a perfected security interest pursuant to this 2023 act if, on January 1, 2024, the requirements for enforceability and perfection pursuant to this 2023 act are satisfied without further action. (b) If a security interest is enforceable and perfected immediately before January 1, 2024, but the requirements for enforceability or perfection pursuant to this 2023 act are not satisfied on January 1, 2024, the security interest: (1) is a perfected security interest until the earlier of the time perfection would have ceased under the law in effect immediately before January 1, 2024 or the adjustment date; (2) remains enforceable thereafter only if the security interest satisfies the requirements for enforceability pursuant to Section 55-9-203 NMSA 1978, as amended by this 2023 act, before the adjustment date; and (3) remains perfected thereafter only if the requirements for perfection pursuant to this 2023 act are satisfied before the time specified in Paragraph (1) of this subsection. History: 1978 Comp., § 55-12A-302, enacted by Laws 2023, ch. 142, § 107. OFFICIAL COMMENTS UCC Official Comments by ALI & the NCCUSL. Reproduced with permission of the PEB for the UCC. All rights reserved. 1. Source. This section derives from Section 9-703. 2. Perfected security interests under pre-2022 Article 9 and 2022 Article 9. This section deals with security interests that are perfected under pre-2022 Article 9 immediately before this act takes effect. Subsection (a) provides, not surprisingly, that if the security interest would be a perfected security interest under 2022 Article 9 ( i.e. , if the transaction satisfies 2022 Article 9's requirements for enforceability (attachment) and perfection), no further action need be taken for the security interest to be a perfected security interest. Example 1: A pre-effective-date security agreement and financing statement covered "all accounts and general intangibles now owned or hereafter acquired." After the effective date the debtor acquired controllable accounts, controllable electronic records, and controllable payment intangibles. The security interest in the after-acquired collateral is enforceable and perfected under both pre-2022 and 2022 Article 9. The controllable accounts are accounts, the controllable electronic records and controllable payment intangibles are general intangibles, and filing is an appropriate method of perfection for that collateral under both versions of Article 9. Other examples of methods of perfection under pre-2022 Article 9 that also would achieve perfection under 2022 Article 9 include filing a financing statement and perfection by control in electronic documents under pre-2022 and amended Section 7-106, in chattel paper under pre-2022 Section 9-105, and in chattel paper evidenced by authoritative electronic records under 2022 Section 9-105. 3. Security interests enforceable and perfected under pre-2022 Article 9 but unenforceable or unperfected under 2022 Article 9. Subsection (b) deals with security interests that are enforceable and perfected under pre-2022 Article 9 immediately before this act takes effect but do not satisfy the requirements for enforceability (attachment) or perfection under 2022 Article 9. These security interests are perfected security interests until the earlier of the time perfection would have ceased under the law in effect immediately before this act takes effect and the adjustment date. If the security interest satisfies the requirements for attachment and perfection within that period, the security interest remains continuously perfected thereafter. If the security interest satisfies only the requirements for attachment within that period, the security interest becomes unperfected on the adjustment date. Example 2: A pre-effective-date security agreement signed by Debtor in favor of Secured Party covers, among other things, "all money . . . and general intangibles now owned or hereafter acquired." Secured Party filed a proper financing statement in the appropriate filing office covering "All personal property." Debtor owns electronic money, spitcoin, issued by the government of El Cuspidouro. Under pre-2022 Article 9 the electronic money might be characterized as a general intangible if "money" were to be construed (at least for purposes of Article 9) to include only tangible money as to which perfection is possible only by possession. See pre-2022 Section 9-312(b)(3). Alternatively, even if the spitcoin is money, perfection might be possible by filing under the baseline rule of Section 9-310, inasmuch as the spitcoin (an intangible) cannot be possessed. Assume, therefore, that under pre-2022 Article 9 Secured Party's security interest in the spitcoin is perfected by filing. Assume also that spitcoin can be subjected to control under Section 9-105A. As to the spitcoin owned by the debtor before the effective date, under Subsection (b) the security interest would remain perfected until the adjustment date but would become unperfected under 2022 Article 9 on the adjustment date unless earlier perfected by control. This is so because a security interest in electronic money that can be subject to control under Section 9-105A, such as spitcoin, may be perfected only by control under 2022 Article 9. Sections 9-312(b)(4); 9-314(a). The security interest in any spitcoin acquired by the debtor after the effective date would be unperfected until the secured party obtains control. Example 3: Secured Party has a pre-effective-date security interest in a security entitlement perfected by control pursuant to Sections 9-106 and 8-106(d)(3), based on control held by Kontroal Phreeque LLC (KP) on behalf of Secured Party. Even in the highly unlikely event that following the effective date the secured party could not prove that KP acknowledged its control on behalf of the secured party in conformity with 2022 Section 8-106(d)(3), its security interest would nevertheless remain perfected beyond the adjustment date. Perfection by control for a security entitlement under Section 9-106 depends on control under 8-106 and, under Section A-301(a), Part 3 of this article, including Subsection (b), does not apply to transactions under Article 8 because Section A-301(a) applies only to Articles 9 and 12. The rules under pre-effective date Article 8 continue to apply to the pre-effective date transaction. As to financial assets acquired and becoming a part of the security entitlement after the effective date, however, 2022 Articles 8 and 9 would apply. Secured Party could perfect its security interest in those financial assets through a complying acknowledgment by KP or by filing. This means for a securities account involving active trading, for example, the secured party should ensure compliance with the 2022 Article 8 control requirements at or before the effective date so as to ensure perfection in post-effective date-acquired financial assets. 4. Interpretation of pre-effective-date security agreements. Section 9-102 defines "security agreement" as "an agreement that creates or provides for a security interest." Under Section 1-201(b)(3), an "agreement" is a "bargain of the parties in fact." If parties to a pre-effective-date security agreement describe the collateral by using a term defined in pre-2022 Article 9 in one way and defined in 2022 Article 9 in another way, in most cases it should be presumed that the bargain of the parties contemplated the meaning of the term under pre-2022 Article 9. Definitions of terms relating to collateral which have been amended in 2022 Article 9 are "account," "chattel paper," "instrument," "money," and "general intangible." A different result might be appropriate, for example, if a security agreement explicitly contemplated future changes in the Article 9 definitions of types of collateral for example, "'Accounts' means 'accounts' as defined in the Uniform Commercial Code Article 9 of [State X], as that definition may be amended from time to time." Whether a different interpretive approach is appropriate in any given case depends on the bargain of the parties, as determined by applying ordinary principles of contract law. Effective dates. — Laws 2023, ch. 142, § 112 made Laws 2023, ch. 142, § 107 effective January 1, 2024.
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