North Dakota Code 41-09-48 – (9-328) Priority of security interests in investment property
The following rules govern priority among conflicting security interests in the same investment property:
Terms Used In North Dakota Code 41-09-48
- 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.
- following: when used by way of reference to a chapter or other part of a statute means the next preceding or next following chapter or other part. See North Dakota Code 1-01-49
- Person: means an individual, organization, government, political subdivision, or government agency or instrumentality. See North Dakota Code 1-01-49
- Property: includes property, real and personal. See North Dakota Code 1-01-49
1. A security interest held by a secured party having control of investment property under section 41-09-06 has priority over a security interest held by 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 section 41-09-06 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:
(1) If the secured party obtained control under subdivision a of subsection 4 of section 41-08-06, the secured party’s becoming the person for which the securities account is maintained; (2) If the secured party obtained control under subdivision b of subsection 4 of section 41-08-06, 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
(3) If the secured party obtained control through another person under subdivision c of subsection 4 of section 41-08-06, 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 subdivision b of subsection 2 of section 41-09-06 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 which is perfected by taking delivery under subsection 1 of section 41-09-33 and not by control under section 41-09-34 has priority over a conflicting security interest perfected by a method other than control.
6. Conflicting security interests created by a broker, securities intermediary, or commodity intermediary which are perfected without control under section 41-09-06 rank equally.
7. In all other cases, priority among conflicting security interests in investment property is governed by sections 41-09-42 and 41-09-43.