The law on the transfer of securities and intermediated securities obtaining or the excesses of an exception for personal property security regime

The Act respecting the transfer of securities and the establishment of security entitlements (hereinafter the "TSESE") has brought about substantial changes in the law governing the establishment of security entitlements. It has indeed created a regime overriding the ordinary rule of law by making a provision for controlling pledges. The TSESE has introduced new provisions into the Civil Code of Quebec. This article proposes a critical view of these provisions since the traditional rules governing the collateralization or opposability of the pledge are now questioned. On the one hand, the substantial delivery of the property or title is replaced by the concept of controlling securities and intermediated titles. While on the other, the time-dependant rule of creditors holding pledges is set aside. The controlling pledge takes precedence over other pledges or hypothecs without dispossession based upon the same securities and intermediated titles. We shall attempt to analyze this transformation - that we deem to be problematical - as regards the classical concept of the pledge. We shall also describe the legal incoherencies and uncertainties brought about by applying such a regime overriding the entirety of Quebec personal property security law.