2007 Minnesota Statutes

336.8-503 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 336.8-511.
(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 336.8-505 through 336.8-508.
(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 336.8-504 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 336.8-504.
History: 1995 c 194 art 1 s 43