KRS 355.9-328: Priority of security interests in investment property.

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 KRS 355.9 -106 has priority over a security interest held b y a secured party

that does not have control of the investment property.

(2) Except as otherwise provided in subsections (3) and (4) of this section, conflicting

security interests held by secured parties each of which has control under KRS

355.9-106 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:

1. If the secured party obtained control under KRS 355.8 -106(4)(a), the

secured party's becoming the person for which the securities account is

maintained;

2. If the secured party obtained control under KRS 355.8 -106(4)(b), the

securities intermediary's agreement to comply with the secured party's

entitlement orders with respect to sec urity entitlements carried or to be

carried in the securities account; or

3. If the secured party obtained control through another person under KRS

355.8-106(4)(c), 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 KRS

355.9-106(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 which is perfected by

taking delivery under KRS 355.9 -313(1) and not by control under KRS 355.9 -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 KRS 355.9 -106

rank equally.

(7) In all other cases, priority among conflicting security interests in investment

property is governed by KRS 355.9-322 and 355.9-323.