2006 New York Code - Property Interest Of Entitlement Holder In Financial Asset Held By Securities Intermediary.

 
  Section 8--503. 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 8--511.
    (b) An entitlement  holder's  property  interest  with  respect  to  a
  particular  financial  asset under subsection (a) 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) may be enforced  against
  the securities intermediary only by exercise of the entitlement holder's
  rights under Sections 8--505 through 8--508.
    (d) An  entitlement  holder's  property  interest  with  respect  to a
  particular financial asset under subsection (a) 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  8--504  by  transferring  the  financial  asset   or
             interest therein to the purchaser; and
         (4) the  purchaser  is  not  protected  under subsection (e). 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),  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 8--504.