of financial asset

(1)__A security interest in favor of a securities intermediary attaches to a person's security entitlement if:

(a) 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; and

(b) The securities intermediary credits the financial asset to the buyer's securities account before the buyer pays the securities intermediary.

(2)__The security interest described in subsection (1) secures the person's obligation to pay for the financial asset.

(3)__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:

(a)__The security or other financial asset:

(i)__In the ordinary course of business is transferred by delivery with any necessary indorsement or assignment; and

(ii)__Is delivered under an agreement between persons in the business of dealing with such securities or financial assets; and

(b)__The agreement calls for delivery against payment.

(4)__The security interest described in subsection (3) secures the obligation to make payment for the delivery.

Official Comment

1. Source. Former 9-116.

2. Codification of "Broker's Lien." Depending upon a securities intermediary's arrangements with its entitlement holders, the securities intermediary may treat the entitlement holder as entitled to financial assets before the entitlement holder has actually made payment for them. For example, many brokers permit retail customers to pay for financial assets by check. The broker may not receive final payment of the check until several days after the broker has credited the customer's