New Jersey § 12a:8-503

§ 12a: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 12A:8-511. 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. may be enforced against the securities intermediary only

by exercise of the entitlement holder's rights under 12A:8-505 through 12A:8-508. d. 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 therein only if: (1) insolvency proceedings have been initiated by or against the securities intermediary; (2) 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; (3) the securities intermediary violated its obligations under 12A:8-504 by transferring

the financial asset or interest therein to the purchaser; and (4) the purchaser is not protected under subsection e. 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. e. An action based on the entitlement holder's property interest with respect to a

particular financial asset under subsection a. 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 12A:8-504.