N.Y. UCC Law § 8-503 — New York Code / Act UCC / Article 8 / Part 5 / Section 8-503
Property Interest of Entitlement Holder in Financial Asset held by Securities Intermediary
Status: in_force

Section 8--503. Property Interest of Entitlement Holder in Financial\n                  Asset held by Securities Intermediary.\n  (a) To the extent necessary for a securities intermediary to satisfy\nall security entitlements with respect to a particular financial asset,\nall interests in that financial asset held by the securities\nintermediary are held by the securities intermediary for the entitlement\nholders, are not property of the securities intermediary, and are not\nsubject to claims of creditors of the securities intermediary, except as\notherwise provided in Section 8--511.\n  (b) An entitlement holder's property interest with respect to a\nparticular financial asset under subsection (a) is a pro rata property\ninterest in all interests in that financial asset held by the securities\nintermediary, without regard to the time the entitlement holder acquired\nthe security entitlement or the time the securities intermediary\nacquired the interest in that financial asset.\n  (c) An entitlement holder's property interest with respect to a\nparticular financial asset under subsection (a) may be enforced against\nthe securities intermediary only by exercise of the entitlement holder's\nrights under Sections 8--505 through 8--508.\n  (d) An entitlement holder's property interest with respect to a\nparticular financial asset under subsection (a) may be enforced against\na purchaser of the financial asset or interest therein only if:\n       (1) insolvency proceedings have been initiated by or against the\n           securities intermediary;\n       (2) the securities intermediary does not have sufficient\n           interests in the financial asset to satisfy the security\n           entitlements of all of its entitlement holders to that\n           financial asset;\n       (3) the securities intermediary violated its obligations under\n           Section 8--504 by transferring the financial asset or\n           interest therein to the purchaser; and\n       (4) the purchaser is not protected under subsection (e). The\n           trustee or other liquidator, acting on behalf of all\n           entitlement holders having security entitlements with respect\n           to a particular financial asset, may recover the financial\n           asset, or interest therein, from the purchaser. If the\n           trustee or other liquidator elects not to pursue that right,\n           an entitlement holder whose security entitlement remains\n           unsatisfied has the right to recover its interest in the\n           financial asset from the purchaser.\n  (e) An action based on the entitlement holder's property interest with\nrespect to a particular financial asset under subsection (a), whether\nframed in conversion, replevin, constructive trust, equitable lien, or\nother theory, may not be asserted against any purchaser of a financial\nasset or interest therein who gives value, obtains control, and does not\nact in collusion with the securities intermediary in violating the\nsecurities intermediary's obligations under Section 8--504.\n