<html xmlns="http://www.w3.org/1999/xhtml" lang="en-US"><head><meta charset="UTF-8"><meta http-equiv='content-language' content='en-us'/><title>SDLRC - Codified Law 57A-9-203 - Attachment and enforceability of security interest--Proceeds--Supporting obligations--Formal requisites.</title><meta name="Generator" content="PowerTools for Open XML"><style>span { white-space: pre-wrap; } p.s428f894a6a7e4e438f7d516f08614b8aNormal { text-indent: 0.50in; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-top: 0; margin-left: 0; margin-right: 0; margin-bottom: .001pt; } span.s428f894a6a7e4e438f7d516f08614b8aSENU { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s428f894a6a7e4e438f7d516f08614b8aCL { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } p.s428f894a6a7e4e438f7d516f08614b8aStatute { text-indent: 0.50in; 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text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-top: 0; margin-left: 0; margin-right: 0; margin-bottom: .001pt; } span.s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont-000001 { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s428f894a6a7e4e438f7d516f08614b8aSCL { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } body { text-decoration-skip-ink: none; } </style><meta name="viewport" content="width=device-width, initial-scale=1"><meta name="twitter:card" content="summary"><meta property="og:title" content="SD 57A-9-203 - Attachment and enforceability of security interest--Proceeds--Supporting obligations--Formal requisites."><meta property="og:description" content="SDLRC Codified Law 57A-9-203 - Attachment and enforceability of security interest--Proceeds--Supporting obligations--Formal requisites."><meta property="og:type" content="website"><meta property="og:url" content="https://sdlegislature.gov/Statutes/57A-9-203"><meta property="og:image" content="https://lawmakerdocuments.blob.core.usgovcloudapi.net/photos/logoshape.webp"><meta property="og:site_name" content="South Dakota Legislature"></head><body><div><p dir="ltr" class="s428f894a6a7e4e438f7d516f08614b8aNormal"><a href="https://sdlegislature.gov/Statutes?Statute=57A-9-203" rel="noopener"><span class="s428f894a6a7e4e438f7d516f08614b8aSENU">57A-9-203</span></a><span xml:space="preserve" class="s428f894a6a7e4e438f7d516f08614b8aSENU">. </span><span class="s428f894a6a7e4e438f7d516f08614b8aCL">Attachment and enforceability of security interest--Proceeds--Supporting obligations--Formal requisites.</span></p><p dir="ltr" class="s428f894a6a7e4e438f7d516f08614b8aStatute"><span class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont">(a) A security interest attaches to collateral when it becomes enforceable against the debtor with respect to the collateral, unless an agreement expressly postpones the time of attachment.</span></p><p dir="ltr" class="s428f894a6a7e4e438f7d516f08614b8aStatute"><span class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont">(b) Except as otherwise provided in subsections (c) through (i), a security interest is enforceable against the debtor and third parties with respect to the collateral only if:</span></p><p dir="ltr" class="s428f894a6a7e4e438f7d516f08614b8aStatuteNumber1"><span class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont">(1)    Value has been given;</span></p><p dir="ltr" class="s428f894a6a7e4e438f7d516f08614b8aStatuteNumber1"><span class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont">(2)    The debtor has rights in the collateral or the power to transfer rights in the collateral to a secured party; and</span></p><p dir="ltr" class="s428f894a6a7e4e438f7d516f08614b8aStatuteNumber1"><span class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont">(3)    One of the following conditions is met:</span></p><p dir="ltr" class="s428f894a6a7e4e438f7d516f08614b8aStatuteNumber2"><span class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont">(A)    The debtor has signed a security agreement that provides a description of the collateral and, if the security interest covers timber to be cut, a description of the land concerned;</span></p><p dir="ltr" class="s428f894a6a7e4e438f7d516f08614b8aStatuteNumber2"><span xml:space="preserve" class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont">(B)    The collateral is not a certificated security and is in the possession of the secured party under § </span><a href="https://sdlegislature.gov/Statutes?Statute=57A-9-313" rel="noopener"><span class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont">57A-9-313</span></a><span xml:space="preserve" class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont"> pursuant to the debtor's security agreement;</span></p><p dir="ltr" class="s428f894a6a7e4e438f7d516f08614b8aStatuteNumber2"><span xml:space="preserve" class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont">(C)    The collateral is a certificated security in registered form and the security certificate has been delivered to the secured party under § </span><a href="https://sdlegislature.gov/Statutes?Statute=57A-8-301" rel="noopener"><span class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont">57A-8-301</span></a><span xml:space="preserve" class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont"> pursuant to the debtor's security agreement;</span></p><p dir="ltr" class="s428f894a6a7e4e438f7d516f08614b8aStatuteNumber2"><span xml:space="preserve" class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont">(D)    The collateral is controllable accounts, controllable electronic records, controllable payment intangibles, deposit accounts, electronic documents, electronic money, investment property, or letter-of-credit rights, and the secured party has control under § </span><a href="https://sdlegislature.gov/Statutes?Statute=57A-7-106" rel="noopener"><span class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont">57A-7-106</span></a><span xml:space="preserve" class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont">, </span><a href="https://sdlegislature.gov/Statutes?Statute=57A-9-104" rel="noopener"><span class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont">57A-9-104</span></a><span xml:space="preserve" class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont">, </span><a href="https://sdlegislature.gov/Statutes?Statute=57A-9-105.1" rel="noopener"><span class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont">57A-9-105.1</span></a><span xml:space="preserve" class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont">, </span><a href="https://sdlegislature.gov/Statutes?Statute=57A-9-106" rel="noopener"><span class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont">57A-9-106</span></a><span xml:space="preserve" class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont">, </span><a href="https://sdlegislature.gov/Statutes?Statute=57A-9-107" rel="noopener"><span class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont">57A-9-107</span></a><span xml:space="preserve" class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont">, or </span><a href="https://sdlegislature.gov/Statutes?Statute=57A-9-107.1" rel="noopener"><span class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont">57A-9-107.1</span></a><span xml:space="preserve" class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont"> pursuant to the debtor's security agreement; or</span></p><p dir="ltr" class="s428f894a6a7e4e438f7d516f08614b8aStatuteNumber2"><span xml:space="preserve" class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont">(E)    The collateral is chattel paper and the secured party has possession and control under § </span><a href="https://sdlegislature.gov/Statutes?Statute=57A-9-314.1" rel="noopener"><span class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont">57A-9-314.1</span></a><span xml:space="preserve" class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont"> pursuant to the debtor's security agreement.</span></p><p dir="ltr" class="s428f894a6a7e4e438f7d516f08614b8aStatute"><span xml:space="preserve" class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont">(c) Subsection (b) is subject to § </span><a href="https://sdlegislature.gov/Statutes?Statute=57A-4-210" rel="noopener"><span class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont">57A-4-210</span></a><span xml:space="preserve" class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont"> on the security interest of a collecting bank, § </span><a href="https://sdlegislature.gov/Statutes?Statute=57A-5-118" rel="noopener"><span class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont">57A-5-118</span></a><span xml:space="preserve" class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont"> on the security interest of a letter-of-credit issuer or nominated person, § </span><a href="https://sdlegislature.gov/Statutes?Statute=57A-9-110" rel="noopener"><span class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont">57A-9-110</span></a><span xml:space="preserve" class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont"> on a security interest arising under chapter </span><a href="https://sdlegislature.gov/Statutes?Statute=57A-2" rel="noopener"><span class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont">57A-2</span></a><span xml:space="preserve" class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont"> or </span><a href="https://sdlegislature.gov/Statutes?Statute=57A-2A" rel="noopener"><span class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont">57A-2A</span></a><span xml:space="preserve" class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont">, and § </span><a href="https://sdlegislature.gov/Statutes?Statute=57A-9-206" rel="noopener"><span class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont">57A-9-206</span></a><span xml:space="preserve" class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont"> on security interests in investment property.</span></p><p dir="ltr" class="s428f894a6a7e4e438f7d516f08614b8aStatute"><span class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont">(d) A person becomes bound as debtor by a security agreement entered into by another person if, by operation of law other than this chapter or by contract:</span></p><p dir="ltr" class="s428f894a6a7e4e438f7d516f08614b8aStatuteNumber1"><span class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont">(1)    The security agreement becomes effective to create a security interest in the person's property; or</span></p><p dir="ltr" class="s428f894a6a7e4e438f7d516f08614b8aStatuteNumber1"><span class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont">(2)    The person becomes generally obligated for the obligations of the other person, including the obligation secured under the security agreement, and acquires or succeeds to all or substantially all of the assets of the other person.</span></p><p dir="ltr" class="s428f894a6a7e4e438f7d516f08614b8aStatute"><span class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont">(e) If a new debtor becomes bound as debtor by a security agreement entered into by another person:</span></p><p dir="ltr" class="s428f894a6a7e4e438f7d516f08614b8aStatuteNumber1"><span class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont">(1)    The agreement satisfies subsection (b)(3) with respect to existing or after-acquired property of the new debtor to the extent the property is described in the agreement; and</span></p><p dir="ltr" class="s428f894a6a7e4e438f7d516f08614b8aStatuteNumber1"><span class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont">(2)    Another agreement is not necessary to make a security interest in the property enforceable.</span></p><p dir="ltr" class="s428f894a6a7e4e438f7d516f08614b8aStatute"><span xml:space="preserve" class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont">(f) The attachment of a security interest in collateral gives the secured party the rights to proceeds provided by § </span><a href="https://sdlegislature.gov/Statutes?Statute=57A-9-315" rel="noopener"><span class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont">57A-9-315</span></a><span xml:space="preserve" class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont"> and is also attachment of a security interest in a supporting obligation for the collateral.</span></p><p dir="ltr" class="s428f894a6a7e4e438f7d516f08614b8aStatute"><span class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont">(g) The attachment of a security interest in a right to payment or performance secured by a security interest or other lien on personal or real property is also attachment of a security interest in the security interest, mortgage, or other lien.</span></p><p dir="ltr" class="s428f894a6a7e4e438f7d516f08614b8aStatute"><span class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont">(h) The attachment of a security interest in a securities account is also attachment of a security interest in the security entitlements carried in the securities account.</span></p><p dir="ltr" class="s428f894a6a7e4e438f7d516f08614b8aStatute"><span class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont">(i) The attachment of a security interest in a commodity account is also attachment of a security interest in the commodity contracts carried in the commodity account.</span></p><p dir="ltr" class="s428f894a6a7e4e438f7d516f08614b8aNormal"><span xml:space="preserve" class="s428f894a6a7e4e438f7d516f08614b8a000000"> </span></p><p dir="ltr" class="s428f894a6a7e4e438f7d516f08614b8aNoIndent"><span xml:space="preserve" class="s428f894a6a7e4e438f7d516f08614b8aDefaultParagraphFont-000001">Source: </span><span class="s428f894a6a7e4e438f7d516f08614b8aSCL">SL 2000, ch 231; SL 2009, ch 254, § 826; SL 2024, ch 198, § 49.</span></p></div></body></html>