70A-8-511 - Priority among security interests and entitlement holders.
70A-8-511. Priority among security interests and entitlement holders.
(1) Except as otherwise provided in Subsections (2) and (3), if a securities intermediarydoes not have sufficient interests in a particular financial asset to satisfy both its obligations toentitlement holders who have security entitlements to that financial asset and its obligation to acreditor of the securities intermediary who has a security interest in that financial asset, the claimsof entitlement holders, other than the creditor, have priority over the claim of the creditor.
(2) A claim of a creditor of a securities intermediary who has a security interest in afinancial asset held by a securities intermediary has priority over claims of the securitiesintermediary's entitlement holders who have security entitlements with respect to that financialasset if the creditor has control over the financial asset.
(3) If a clearing corporation does not have sufficient financial assets to satisfy both itsobligations to entitlement holders who have security entitlements with respect to a financial assetand its obligation to a creditor of the clearing corporation who has a security interest in thatfinancial asset, the claim of the creditor has priority over the claims of entitlement holders.
Enacted by Chapter 204, 1996 General Session