N.Y. Uniform Commercial Code Law § 8-511: Priority Among Security Interests and Entitlement Holders

Section 8--511. Priority Among Security Interests and Entitlement

Holders.

(a) Except as otherwise provided in subsections (b) and (c), if a

securities intermediary does not have sufficient interests in a

particular financial asset to satisfy both its obligations to

entitlement holders who have security entitlements to that financial

asset and its obligation to a creditor of the securities intermediary

who has a security interest in that financial asset, the claims of

entitlement holders, other than the creditor, have priority over the

claim of the creditor.

(b) A claim of a creditor of a securities intermediary who has a

security interest in a financial asset held by a securities intermediary

has priority over claims of the securities intermediary's entitlement

holders who have security entitlements with respect to that financial

asset if the creditor has control over the financial asset.

(c) If a clearing corporation does not have sufficient financial

assets to satisfy both its obligations to entitlement holders who have

security entitlements with respect to a financial asset and its

obligation to a creditor of the clearing corporation who has a security

interest in that financial asset, the claim of the creditor has priority

over the claims of entitlement holders.