A. 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.

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Terms Used In Arizona Laws 47-8511

  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Clearing corporation: means :

    (a) A person that is registered as a "clearing agency" under the federal securities laws;

    (b) A federal reserve bank; or

    (c) Any other person that provides clearance or settlement services with respect to financial assets that would require it to register as a clearing agency under the federal securities laws but for an exclusion or exemption from the registration requirement, if its activities as a clearing corporation, including promulgation of rules, are subject to regulation by a federal or state governmental authority. See Arizona Laws 47-8102

  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Entitlement: A Federal program or provision of law that requires payments to any person or unit of government that meets the eligibility criteria established by law. Entitlements constitute a binding obligation on the part of the Federal Government, and eligible recipients have legal recourse if the obligation is not fulfilled. Social Security and veterans' compensation and pensions are examples of entitlement programs.
  • Financial asset: except as otherwise provided in section 47-8103, means:

    (a) A security;

    (b) An obligation of a person or a share, participation or other interest in a person or in property or an enterprise of a person, which is, or is of a type, dealt in or traded on financial markets, or which is recognized in any area in which it is issued or dealt in as a medium for investment; or

    (c) Any property that is held by a securities intermediary for another person in a securities account if the securities intermediary has expressly agreed with the other person that the property is to be treated as a financial asset under this chapter. See Arizona Laws 47-8102

  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • Securities intermediary: means :

    (a) A clearing corporation; or

    (b) A person, including a bank or broker, that in the ordinary course of its business maintains securities accounts for others and is acting in that capacity. See Arizona Laws 47-8102

  • Security: except as otherwise provided in section 47-8103, means an obligation of an issuer or a share, participation or other interest in an issuer or in property or an enterprise of an issuer:

    (a) Which is represented by a security certificate in bearer or registered form, or the transfer of which may be registered upon books maintained for that purpose by or on behalf of the issuer;

    (b) Which is one of a class or series or by its terms is divisible into a class or series of shares, participations, interests or obligations; and

    (c) Which:

    (i) Is, or is of a type, dealt in or traded on securities exchanges or securities markets; or

    (ii) Is a medium for investment and by its terms expressly provides that it is a security governed by this chapter. See Arizona Laws 47-8102

B. 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. 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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