                                 CODE OF VIRGINIA

PRIORITY AMONG SECURITY INTERESTS AND ENTITLEMENT HOLDERS (§ 8.8A-511)

a. Except as otherwise provided in subsections (b) and (c), if a securities
intermediary does not have sufficient interests in a particular financial asset
to satisfy both its obligations to entitlement holders who have security
entitlements to that financial asset and its obligation to a creditor of the
securities intermediary who has a security interest in that financial asset, the
claims of entitlement holders, other than the creditor, have priority over the
claim of the creditor.

b. A claim of a creditor of a securities intermediary who has a security
interest in a financial asset held by a securities intermediary has priority
over claims of the securities intermediary&#8217;s entitlement holders who have
security entitlements with respect to that financial asset if the creditor has
control over the financial asset.

c. If a clearing corporation does not have sufficient financial assets to
satisfy both its obligations to entitlement holders who have security
entitlements with respect to a financial asset and its obligation to a creditor
of the clearing corporation who has a security interest in that financial asset,
the claim of the creditor has priority over the claims of entitlement holders.

HISTORY: 1996, c. 216.