47-8503

47-8503. Property interest of entitlement
holder in financial asset held by securities intermediary

A. To the extent necessary for a securities intermediary to satisfy all security
entitlements with respect to a particular financial asset, all interests in that
financial asset held by the securities intermediary are held by the securities
intermediary for the entitlement holders, are not property of the securities intermediary
and are not subject to claims of creditors of the securities intermediary, except as
otherwise provided in section 47-8511.

B. An entitlement holder's property interest with respect to a particular financial
asset under subsection A of this section is a pro rata property interest in all interests
in that financial asset held by the securities intermediary, without regard to the time
the entitlement holder acquired the security entitlement or the time the securities
intermediary acquired the interest in that financial asset.

C. An entitlement holder's property interest with respect to a particular financial
asset under subsection A of this section may be enforced against the securities
intermediary only by exercise of the entitlement holder's rights under sections 47-8505
through 47-8508.

D. An entitlement holder's property interest with respect to a particular financial
asset under subsection A of this section may be enforced against a purchaser of the
financial asset or interest therein only if:

1. Insolvency proceedings have been initiated by or against the securities
intermediary;

2. The securities intermediary does not have sufficient interests in the financial
asset to satisfy the security entitlements of all of its entitlement holders to that
financial asset;

3. The securities intermediary violated its obligations under section 47-8504 by
transferring the financial asset or interest therein to the purchaser; and

4. The purchaser is not protected under subsection E of this section. The trustee
or other liquidator, acting on behalf of all entitlement holders having security
entitlements with respect to a particular financial asset, may recover the financial
asset, or interest therein, from the purchaser. If the trustee or other liquidator
elects not to pursue that right, an entitlement holder whose security entitlement remains
unsatisfied has the right to recover its interest in the financial asset from the
purchaser.

E. An action based on the entitlement holder's property interest with respect to a
particular financial asset under subsection A of this section, whether framed in
conversion, replevin, constructive trust, equitable lien, or other theory, may not be
asserted against any purchaser of a financial asset or interest therein who gives value,
obtains control and does not act in collusion with the securities intermediary in
violating the securities intermediary's obligations under section 47-8504.