Texas Business & Commerce Code

§ 8.503 — PROPERTY INTEREST OF ENTITLEMENT HOLDER IN FINANCIAL ASSET HELD BY SECURITIES INTERMEDIARY

BC § 8.503Title 1. UNIFORM COMMERCIAL CODE · Ch. 8. INVESTMENT SECURITIES · Art. E. SECURITY ENTITLEMENTS

Statute text

(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 8.505-8.508.

(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;

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Legislative history

Added by Acts 1995, 74th Leg., ch. 962, Sec. 1, eff. Sept. 1, 1995.