Idaho State Statutes - Idaho Attorney Directory

PROPERTY INTEREST OF ENTITLEMENT HOLDER IN FINANCIAL ASSET HELD
BY SECURITIES INTERMEDIARY. (1) 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 section 28-8-511.
(2) An entitlement holder's property interest with respect to a
particular financial asset under subsection (1) 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.
(3) An entitlement holder's property interest with respect to a
particular financial asset under subsection (1) of this section may be
enforced against the securities intermediary only by exercise of the
entitlement holder's rights under sections 28-8-505 through 28-8-508.
(4) An entitlement holder's property interest with respect to a
particular financial asset under subsection (1) of this section may be
enforced against a purchaser of the financial asset or interest therein only
if:
(a) Insolvency proceedings have been initiated by or against the
securities intermediary;
(b) 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;
(c) The securities intermediary violated its obligations under section
28-8-504 by transferring the financial asset or interest therein to the
purchaser; and
(d) The purchaser is not protected under subsection (5) of this section.
The trustee or other liquidator, acting on behalf of all entitlement holders
having security entitlements with respect to a particular financial asset, may
recover the financial asset, or interest therein, from the purchaser. If the
trustee or other liquidator elects not to pursue that right, an entitlement
holder whose security entitlement remains unsatisfied has the right to recover
its interest in the financial asset from the purchaser.
(5) An action based on the entitlement holder's property interest with
respect to a particular financial asset under subsection (1) of this section,
whether framed in conversion, replevin, constructive trust, equitable lien or
other theory, may not be asserted against any purchaser of a financial asset
or interest therein who gives value, obtains control, and does not act in
collusion with the securities intermediary in violating the securities
intermediary's obligations under section 28-8-504.

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