Maine Revised Statutes Title 11 Sec. 8-1503 – Property interest of entitlement holder in financial asset held by securities intermediary
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(1). 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 8?1511.
[PL 1997, c. 429, Pt. B, §2 (NEW).]
Terms Used In Maine Revised Statutes Title 11 Sec. 8-1503
- 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.
- Entitlement holder: means a person identified in the records of a securities intermediary as the person having a security entitlement against the securities intermediary. See Maine Revised Statutes Title 11 Sec. 8-1102
- 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
- Financial asset: except as otherwise provided in section 8?1103, means: (i) A security;(ii) An obligation of a person or a share, participation or other interest in a person or in property or an enterprise of a person that is, or is of a type, dealt in or traded on financial markets or that is recognized in any area in which it is issued or dealt in as a medium for investment; or(iii) 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 Article. See Maine Revised Statutes Title 11 Sec. 8-1102
- Lien: A claim against real or personal property in satisfaction of a debt.
- Securities intermediary: means :
(i) A clearing corporation; or(ii) 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 Maine Revised Statutes Title 11 Sec. 8-1102- Security: except as otherwise provided in section 8?1103, 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:
(i) That 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;(ii) That 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(iii) That:(A) Is, or is of a type, dealt in or traded on securities exchanges or securities markets; or(B) Is a medium for investment and by its terms expressly provides that it is a security governed by this Article. See Maine Revised Statutes Title 11 Sec. 8-1102- Security entitlement: means the rights and property interest of an entitlement holder with respect to a financial asset specified in Part 5. See Maine Revised Statutes Title 11 Sec. 8-1102
- Trustee: A person or institution holding and administering property in trust.
(2). An entitlement holder‘s property interest with respect to a particular financial asset under subsection (1) 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.[PL 1997, c. 429, Pt. B, §2 (NEW).]
(3). An entitlement holder’s property interest with respect to a particular financial asset under subsection (1) may be enforced against the securities intermediary only by exercise of the entitlement holder’s rights under sections 8?1505 to 8?1508.[PL 1997, c. 429, Pt. B, §2 (NEW).]
(4). An entitlement holder’s property interest with respect to a particular financial asset under subsection (1) may be enforced against a purchaser of the financial asset or interest in the financial asset only if:(a). Insolvency proceedings have been initiated by or against the securities intermediary; [PL 1997, c. 429, Pt. B, §2 (NEW).](b). 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; [PL 1997, c. 429, Pt. B, §2 (NEW).](c). The securities intermediary violated its obligations under section 8?1504 by transferring the financial asset or interest in the financial asset to the purchaser; and [PL 1997, c. 429, Pt. B, §2 (NEW).](d). The purchaser is not protected under subsection (5). 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 in the financial asset, 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. [PL 1997, c. 429, Pt. B, §2 (NEW).][PL 1997, c. 429, Pt. B, §2 (NEW).]
(5). An action based on the entitlement holder’s property interest with respect to a particular financial asset under subsection (1), 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 in a financial asset who gives value, obtains control and does not act in collusion with the securities intermediary in violating the securities intermediary’s obligations under section 8?1504.[PL 1997, c. 429, Pt. B, §2 (NEW).]
SECTION HISTORYPL 1997, c. 429, §B2 (NEW).