| The perfection and priority rules of this Article are designed |
to facilitate current secured financing arrangements for |
securities firms as well as to provide sufficient flexibility to |
accommodate new arrangements that develop in the future. Hard |
pledge arrangements are covered by the concept of control. See |
Sections 9-314 [Maine cite section 9-1314], 9-106 [Maine cite |
section 9-1106], 8-106. Non-control secured financing |
arrangements for securities firms are covered by the automatic |
perfection rule of paragraph (10) [Maine cite paragraph (j)]. |
Before the 1994 revision of Articles 8 and 9, agreement to pledge |
arrangements could be implemented under a provision that a |
security interest in securities given for new value under a |
written security agreement was perfected without filing or |
possession for a period of 21 days. Although the security |
interests were temporary in legal theory, the financing |
arrangements could, in practice, be continued indefinitely by |
rolling over the loans at least every 21 days. Accordingly, a |
knowledgeable creditor of a securities firm realizes that the |
firm's securities may be subject to security interests that are |
not discoverable from any public records. The automatic- |
perfection rule of paragraph (10) [Maine cite paragraph (j)] |
makes it unnecessary to engage in the purely formal practice of |
rolling over these arrangements every 21 days. |