§ 355-8-511

355.8 -511 Priority among security interests and entitlement holders. (1) Except as otherwise provided in subsections (2) and (3) of this section, 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 t o 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. (2) A clai m 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 tha t financial asset if the creditor has control over the financial asset. (3) 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 financia l asset and its obligation to a creditor of the clearing corporation who has a security interest

both its obligations to entitlement holders who have security entitlements with respect to a financia l 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. Effective: January 1, 1997 History: Created 1996 Ky. Ac ts ch. 130, sec. 164, effective January 1, 1997.