Perfection
The step that makes a security interest effective against third parties and insolvency practitioners, usually registration.
A security interest attaches when the agreement is made and the grantor has rights in the collateral; it is perfected by registration, by the secured party taking possession, or by control for some financial property. Only a perfected interest survives the grantor's insolvency and ranks in priority.
Related terms
- Attachment — The moment a security interest comes into existence against the grantor.
- Registration — An entry on the PPSR recording a security interest; the main way to perfect an interest.
- Priority — The order in which competing security interests are paid out of the same collateral.
Need this registered, not just defined?
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