§ 6A-8-503 - Property interest of entitlement holder in financial asset held by securities intermediary.
SECTION 6A-8-503
§ 6A-8-503 Property interest ofentitlement holder in financial asset held by securities intermediary. –(a) To the extent necessary for a securities intermediary to satisfy allsecurity entitlements with respect to a particular financial asset, allinterests in that financial asset held by the securities intermediary are heldby the securities intermediary for the entitlement holders, are not property ofthe securities intermediary, and are not subject to claims of creditors of thesecurities intermediary, except as otherwise provided in § 6A-8-511.
(b) An entitlement holder's property interest with respect toa particular financial asset under subsection (a) is a pro rata propertyinterest in all interests in that financial asset held by the securitiesintermediary, without regard to the time the entitlement holder acquired thesecurity entitlement or the time the securities intermediary acquired theinterest in that financial asset.
(c) An entitlement holder's property interest with respect toa particular financial asset under subsection (a) may be enforced against thesecurities intermediary only by exercise of the entitlement holder's rightsunder §§ 6A-8-505 through 6A-8-508.
(d) An entitlement holder's property interest with respect toa particular financial asset under subsection (a) may be enforced against apurchaser of the financial asset or interest therein only if:
(1) insolvency proceedings have been initiated by or againstthe securities intermediary;
(2) the securities intermediary does not have sufficientinterests in the financial asset to satisfy the security entitlements of all ofits entitlement holders to that financial asset;
(3) the securities intermediary violated its obligationsunder § 6A-8-504 by transferring the financial asset or interest thereinto the purchaser; and
(4) the purchaser is not protected under subsection (e).
The trustee or other liquidator, acting on behalf of allentitlement holders having security entitlements with respect to a particularfinancial asset, may recover the financial asset, or interest therein, from thepurchaser. If the trustee or other liquidator elects not to pursue that right,an entitlement holder whose security entitlement remains unsatisfied has theright to recover its interest in the financial asset from the purchaser.
(e) An action based on the entitlement holder's propertyinterest with respect to a particular financial asset under subsection (a),whether framed in conversion, replevin, constructive trust, equitable lien, orother theory, may not be asserted against any purchaser of a financial asset orinterest therein who gives value, obtains control, and does not act incollusion with the securities intermediary in violating the securitiesintermediary's obligations under § 6A-8-504.