Priority of security interests in investment property

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  • The following rules govern priority among conflicting security interests in the same investment property:
    • (1) A security interest held by a secured party having control of investment property under § 9–106 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 paragraphs (3) and (4), conflicting security interests held by secured parties each of which has control under § 9–106 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 § 8–106(d)(1), the secured party's becoming the person for which the securities account is maintained;

        • (ii) if the secured party obtained control under § 8–106(d)(2), 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 § 8–106(d)(3), the time on which priority would be based under this paragraph 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 § 9–106(b)(2) 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 § 9–313(a) and not by control under § 9–314 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 § 9–106 rank equally.

    • (7) In all other cases, priority among conflicting security interests in investment property is governed by Sections 9–322 and 9–323.


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