Pennsylvania § 8511 Priority among security interests and entitlement holders

Pennsylvania Statutes

§ 8511 — Priority among security interests and entitlement holders

Pennsylvania·Title 13 COMMERCIAL CODE·Ch. 85 SECURITY ENTITLEMENTS

(a)General rule.--Except as otherwise provided in subsections (b) and (c), if a securities intermediary does not have sufficient interests in a particular financial asset to satisfy both its obligations to entitlement holders who have security entitlements to that financial asset and its obligation to a creditor of the securities intermediary who has a security interest in that financial asset, the claims of entitlement holders other than the creditor have priority over the claim of the creditor.

(b)When creditor of securities intermediary has control over financial asset.--A claim of a creditor of a securities intermediary who has a security interest in a financial asset held by a securities intermediary has priority over claims of the securities intermediary's entitlement holders who

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(a) General rule.--Except as otherwise provided in subsections (b) and (c), if a securities intermediary does not have sufficient interests in a particular financial asset to satisfy both its obligations to entitlement holders who have security entitlements to that financial asset and its obligation to a creditor of the securities intermediary who has a security interest in that financial asset, the claims of entitlement holders other than the creditor have priority over the claim of the creditor.

(b) When creditor of securities intermediary has control over financial asset.--A claim of a creditor of a securities intermediary who has a security interest in a financial asset held by a securities intermediary has priority over claims of the securities intermediary's entitlement holders who have security entitlements with respect to that financial asset if the creditor has control over the financial asset.

(c) Clearing corporations.--If a clearing corporation does not have sufficient financial assets to satisfy both its obligations to entitlement holders who have security entitlements with respect to a financial asset and its obligation to a creditor of the clearing corporation who has a security interest in that financial asset, the claim of the creditor has priority over the claims of entitlement holders.

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