N.Y. Uniform Commercial Code 8-510 – Rights of Purchaser of Security Entitlement from Entitlement Holder
Section 8–510. Rights of Purchaser of Security Entitlement from
Terms Used In N.Y. Uniform Commercial Code 8-510
- 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.
- Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
- Lien: A claim against real or personal property in satisfaction of a debt.
Entitlement Holder.
(a) In a case not covered by the priority rules in Article 9 or the rules stated in subsection (c), an action based on an adverse claim to a financial asset or security entitlement, whether framed in conversion, replevin, constructive trust, equitable lien, or other theory, may not be asserted against a person who purchases a security entitlement, or an interest therein, from an entitlement holder if the purchaser gives value, does not have notice of the adverse claim, and obtains control.
(b) If an adverse claim could not have been asserted against an entitlement holder under Section 8–502, the adverse claim cannot be asserted against a person who purchases a security entitlement, or an interest therein, from the entitlement holder.
(c) In a case not covered by the priority rules in Article 9, a purchaser for value of a security entitlement, or an interest therein, who obtains control has priority over a purchaser of a security entitlement, or an interest therein, who does not obtain control. Except as otherwise provided in subsection (d), purchasers who have control rank according to priority in time of:
(1) the purchaser's becoming the person for whom the securities
account, in which the security entitlement is carried, is
maintained, if the purchaser obtained control under Section
8–106(d)(1);
(2) the securities intermediary's agreement to comply with the
purchaser's entitlement orders with respect to security
entitlements carried or to be carried in the securities
account in which the security entitlement is carried, if the
purchaser obtained control under Section 8–106(d)(2); or
(3) if the purchaser obtained control through another person
under Section 8–106(d)(3), the time on which priority would
be based under this subsection if the other person were the
secured party.
(d) A securities intermediary as purchaser has priority over a conflicting purchaser who has control unless otherwise agreed by the securities intermediary.