The agreement in which a debtor (known as the entitlement holder (www.practicallaw.com/0-383-2179)), secured party (www.practicallaw.com/8-382-3802) and securities intermediary (www.practicallaw.com/3-382-3809) maintaining the securities account (www.practicallaw.com/6-382-3803) have agreed that the securities intermediary will comply with instructions (known as entitlement orders (www.practicallaw.com/8-383-2180)) originated by the secured party without further consent by the debtor (UCC (www.practicallaw.com/1-382-3891) §8-106(d)). The securities account control agreement enables the secured party to obtain control (www.practicallaw.com/7-382-3360) over the security entitlement (www.practicallaw.com/0-383-2221), and therefore the securities account, and so enables its security interest (www.practicallaw.com/7-382-3812) in the securities account to be perfected (www.practicallaw.com/0-382-3684) (UCC §9-106). It is an example of a collateral document (www.practicallaw.com/8-382-3345) entered into by a debtor to secure obligations under a loan agreement.
For further information, see Practice Note, Security Interests: Investment Property (www.practicallaw.com/8-382-3067).