C.R.S. Section 4-8-503
Property interest of entitlement holder in financial asset held by securities intermediary

(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 section 4-8-511.

(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) of this section may be enforced against the securities intermediary only by exercise of the entitlement holder’s rights under sections 4-8-505 through 4-8-508.

(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 section 4-8-504 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 section 4-8-504.

Source: Section 4-8-503 — Property interest of entitlement holder in financial asset held by securities intermediary, https://leg.­colorado.­gov/sites/default/files/images/olls/crs2023-title-04.­pdf (accessed Oct. 20, 2023).

4‑8‑101
Short title 4‑8‑102
Definitions 4‑8‑103
Rules for determining whether certain obligations and interests are securities or financial assets 4‑8‑104
Acquisition of security or financial asset or interest therein 4‑8‑105
Notice of adverse claim 4‑8‑106
Control 4‑8‑107
Whether indorsement, instruction, or entitlement order is effective 4‑8‑108
Warranties in direct holding 4‑8‑109
Warranties in indirect holding 4‑8‑110
Applicability - choice of law 4‑8‑111
Clearing corporation rules 4‑8‑112
Creditor’s legal process 4‑8‑113
Statute of frauds inapplicable 4‑8‑114
Evidentiary rules concerning certificated securities 4‑8‑115
Securities intermediary and others not liable to adverse claimant 4‑8‑116
Securities intermediary as purchaser for value 4‑8‑201
Issuer 4‑8‑202
Issuer’s responsibility and defenses - notice of defect or defense 4‑8‑203
Staleness as notice of defect or defense 4‑8‑204
Effect of issuer’s restriction on transfer 4‑8‑205
Effect of unauthorized signature on security certificate 4‑8‑206
Completion or alteration of security certificate 4‑8‑207
Rights and duties of issuer with respect to registered owners 4‑8‑208
Effect of signature of authenticating trustee, registrar, or transfer agent 4‑8‑209
Issuer’s lien 4‑8‑210
Overissue 4‑8‑301
Delivery 4‑8‑302
Rights of purchaser 4‑8‑303
Protected purchaser 4‑8‑304
Indorsement 4‑8‑305
Instruction 4‑8‑306
Effect of guaranteeing signature, indorsement, or instruction 4‑8‑307
Purchaser’s right to requisites for registration of transfer 4‑8‑401
Duty of issuer to register transfer 4‑8‑402
Assurance that indorsement or instruction is effective 4‑8‑403
Demand that issuer not register transfer 4‑8‑404
Wrongful registration 4‑8‑405
Replacement of lost, destroyed, or wrongfully taken security certificate 4‑8‑406
Obligation to notify issuer of lost, destroyed, or wrongfully taken security certificate 4‑8‑407
Authenticating trustee, transfer agent, and registrar 4‑8‑501
Securities account - acquisition of security entitlement from securities intermediary 4‑8‑502
Assertion of adverse claim against entitlement holder 4‑8‑503
Property interest of entitlement holder in financial asset held by securities intermediary 4‑8‑504
Duty of securities intermediary to maintain financial asset 4‑8‑505
Duty of securities intermediary with respect to payments and distributions 4‑8‑506
Duty of securities intermediary to exercise rights as directed by entitlement holder 4‑8‑507
Duty of securities intermediary to comply with entitlement order 4‑8‑508
Duty of securities intermediary to change entitlement holder’s position to other form of security holding 4‑8‑509
Specification of duties of securities intermediary by other statute or regulation - manner of performance of duties of securities intermediary and exercise of rights of entitlement holder 4‑8‑510
Rights of purchaser of security entitlement from entitlement holder 4‑8‑511
Priority among security interests and entitlement holders 4‑8‑601
Effective date 4‑8‑602
Repeals 4‑8‑603
Saving clause
Green check means up to date. Up to date

Current through Fall 2024

§ 4-8-503’s source at colorado​.gov