California Commercial Code 9206 – (a) A security interest in favor of a securities intermediary …
(a) A security interest in favor of a securities intermediary attaches to a person‘s security entitlement if both of the following conditions are satisfied:
(1) The person buys a financial asset through the securities intermediary in a transaction in which the person is obligated to pay the purchase price to the securities intermediary at the time of the purchase.
Terms Used In California Commercial Code 9206
- agreement: means the total legal obligation that results from the parties' agreement as determined by this code and as supplemented by any other applicable laws. See California Commercial Code 1201
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Entitlement: A Federal program or provision of law that requires payments to any person or unit of government that meets the eligibility criteria established by law. Entitlements constitute a binding obligation on the part of the Federal Government, and eligible recipients have legal recourse if the obligation is not fulfilled. Social Security and veterans' compensation and pensions are examples of entitlement programs.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Person: means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, government, governmental subdivision, agency, or instrumentality, or any other legal or commercial entity. See California Commercial Code 1201
- Purchase: means taking by sale, lease, discount, negotiation, mortgage, pledge, lien, security interest, issue or reissue, gift, or any other voluntary transaction creating an interest in property. See California Commercial Code 1201
- Security interest: includes any interest of a consignor and a buyer of accounts, chattel paper, a payment intangible, or a promissory note in a transaction that is subject to Division 9 (commencing with Section 9101). See California Commercial Code 1201
- Writing: includes printing, typewriting, or any other intentional reduction to tangible form. See California Commercial Code 1201
(2) The securities intermediary credits the financial asset to the buyer’s securities account before the buyer pays the securities intermediary.
(b) The security interest described in subdivision (a) secures the person’s obligation to pay for the financial asset.
(c) A security interest in favor of a person that delivers a certificated security or other financial asset represented by a writing attaches to the security or other financial asset if both of the following conditions are satisfied:
(1) The security or other financial asset satisfies both of the following:
(A) In the ordinary course of business it is transferred by delivery with any necessary endorsement or assignment.
(B) It is delivered under an agreement between persons in the business of dealing with those securities or financial assets.
(2) The agreement calls for delivery against payment.
(d) The security interest described in subdivision (c) secures the obligation to make payment for the delivery.
(Repealed and added by Stats. 1999, Ch. 991, Sec. 35. Effective January 1, 2000. Operative July 1, 2001, by Sec. 75 of Ch. 991 and Section 9701.)