Montana Code 30-9A-328. Priority of security interests in investment property
30-9A-328. Priority of security interests in investment property. The following rules govern priority among conflicting security interests in the same investment property:
Terms Used In Montana Code 30-9A-328
- Collateral: means the property subject to a security interest or agricultural lien. See Montana Code 30-9A-102
- Commodity account: means an account maintained by a commodity intermediary in which a commodity contract is carried for a commodity customer. See Montana Code 30-9A-102
- Commodity contract: means a commodity futures contract, an option on a commodity futures contract, a commodity option, or another contract if the contract or option is:
(i)traded on or subject to the rules of a board of trade that has been designated as a contract market for such a contract pursuant to federal commodities laws; or
(ii)traded on a foreign commodity board of trade, exchange, or market and is carried on the books of a commodity intermediary for a commodity customer. See Montana Code 30-9A-102
- Commodity intermediary: means a person that:
(i)is registered as a futures commission merchant under federal commodities law; or
(ii)in the ordinary course of its business provides clearance or settlement services for a board of trade that has been designated as a contract market pursuant to federal commodities law. See Montana Code 30-9A-102
- Contract: A legal written agreement that becomes binding when signed.
- 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.
- Investment property: means a security, whether certificated or uncertificated, security entitlement, securities account, commodity contract, or commodity account. See Montana Code 30-9A-102
- Person: includes a corporation or other entity as well as a natural person. See Montana Code 1-1-201
- Property: means real and personal property. See Montana Code 1-1-205
- Secured party: means :
(i)a person in whose favor a security interest is created or provided for under a security agreement, whether or not any obligation to be secured is outstanding;
(ii)a person that holds an agricultural lien;
(iii)a consignor;
(iv)a person to which accounts, chattel paper, payment intangibles, or promissory notes have been sold;
(v)a trustee, indenture trustee, agent, collateral agent, or other representative in whose favor a security interest or agricultural lien is created or provided for; or
(vi)a person that holds a security interest arising under 30-2-401, 30-2-505, 30-2-711(3), 30-2A-508(5), 30-4-208, or 30-5-118. See Montana Code 30-9A-102
(1)A security interest held by a secured party having control of investment property under 30-9A-106 has priority over a security interest of a secured party that does not have control of the investment property.
(2)Except as otherwise provided in subsections (3) and (4), conflicting security interests held by secured parties each of which has control under 30-9A-106 rank according to priority in time of:
(a)if the collateral is a security, obtaining control;
(b)if the collateral is a security entitlement carried in a securities account and:
(i)if the secured party obtained control under 30-8-116(4)(a), the secured party’s becoming the person for which the securities account is maintained;
(ii)if the secured party obtained control under 30-8-116(4)(b), the securities intermediary’s agreement to comply with the secured party’s entitlement orders with respect to security entitlements carried or to be carried in the securities account; or
(iii)if the secured party obtained control through another person under 30-8-116(4)(c), the time on which priority would be based under this subsection if the other person were the secured party; or
(c)if the collateral is a commodity contract carried with a commodity intermediary, the satisfaction of the requirement for control specified in 30-9A-106(2)(b) with respect to commodity contracts carried or to be carried with the commodity intermediary.
(3)A security interest held by a securities intermediary in a security entitlement or a securities account maintained with the securities intermediary has priority over a conflicting security interest held by another secured party.
(4)A security interest held by a commodity intermediary in a commodity contract or a commodity account maintained with the commodity intermediary has priority over a conflicting security interest held by another secured party.
(5)A security interest in a certificated security in registered form that is perfected by taking delivery under 30-9A-313(1) and not by control under 30-9A-314 has priority over a conflicting security interest perfected by a method other than control.
(6)Conflicting security interests granted by a broker, securities intermediary, or commodity intermediary that are perfected without control under 30-9A-106 rank equally.
(7)In all other cases, priority among conflicting security interests in investment property is governed by 30-9A-322 and 30-9A-323.