Ch. 92

1996 LAWS OF MARYLAND

THE OTHER PERSON IS TREATED AS HOLDING THE FINANCIAL ASSET DIRECTLY
RATHER THAN AS HAVING A SECURITY ENTITLEMENT WITH RESPECT TO THE
FINANCIAL ASSET.

(E) ISSUANCE OF A SECURITY IS NOT ESTABLISHMENT OF A SECURITY
ENTITLEMENT.

8-502.

AN ACTION BASED ON AN ADVERSE CLAIM TO A FINANCIAL ASSET, WHETHER
FRAMED IN CONVERSION, REPLEVIN, CONSTRUCTIVE TRUST, EQUITABLE LIEN, OR
OTHER THEORY, MAY NOT BE ASSERTED AGAINST A PERSON WHO ACQUIRES A
SECURITY ENTITLEMENT UNDER § 8-501 OF THIS SUBTITLE FOR VALUE AND
WITHOUT NOTICE OF THE ADVERSE CLAIM

8-503.

(A)    TO THE EXTENT NECESSARY FOR A SECURITIES INTERMEDIARY TO
SATISFY ALL SECURITY ENTITLEMENTS WITH RESPECT TO A PARTICULAR
FINANCIAL ASSET, ALL INTERESTS IN THAT FINANCIAL ASSET HELD BY THE
SECURITIES INTERMEDIARY ARE HELD BY THE SECURITIES INTERMEDIARY FOR
THE ENTITLEMENT HOLDERS, ARE NOT PROPERTY OF THE SECURITIES
INTERMEDIARY, AND ARE NOT SUBJECT TO CLAIMS OF CREDITORS OF THE
SECURITIES INTERMEDIARY, EXCEPT AS OTHERWISE PROVIDED IN § 8-511 OF THIS
SUBTITLE.

(B)     AN ENTITLEMENT HOLDER'S PROPERTY INTEREST WITH RESPECT TO A
PARTICULAR FINANCIAL ASSET UNDER SUBSECTION (A) OF THIS SECTION IS A PRO
RATA PROPERTY INTEREST IN ALL INTERESTS IN THAT FINANCIAL ASSET HELD BY
THE SECURITIES INTERMEDIARY, WITHOUT REGARD TO THE TIME THE
ENTITLEMENT HOLDER ACQUIRED THE SECURITY ENTITLEMENT OR THE TIME THE
SECURITIES INTERMEDIARY ACQUIRED THE INTEREST IN THAT FINANCIAL ASSET.

(C)     AN ENTITLEMENT HOLDER'S PROPERTY INTEREST WITH RESPECT TO A
PARTICULAR FINANCIAL ASSET UNDER SUBSECTION (A) OF THIS SECTION MAY BE
ENFORCED AGAINST THE SECURITIES INTERMEDIARY ONLY BY EXERCISE OF THE
ENTITLEMENT HOLDER'S RIGHTS UNDER §§ 8-505 THROUGH 8-508 OF THIS SUBTITLE.

(D)    (1) AN ENTITLEMENT HOLDER'S PROPERTY INTEREST WITH RESPECT
TO A PARTICULAR FINANCIAL ASSET UNDER SUBSECTION (A) OF THIS SECTION MAY
BE ENFORCED AGAINST A PURCHASER OF THE FINANCIAL ASSET OR INTEREST IN
THE FINANCIAL ASSET ONLY IF:

(I)      INSOLVENCY PROCEEDINGS HAVE BEEN INITIATED BY OR
AGAINST THE SECURITIES INTERMEDIARY;

(II)     THE SECURITIES INTERMEDIARY DOES NOT HAVE SUFFICIENT
INTERESTS IN THE FINANCIAL ASSET TO SATISFY THE SECURITY ENTITLEMENTS OF
ALL OF ITS ENTITLEMENT HOLDERS TO THAT FINANCIAL ASSET;

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