LD 2245, Page 233 - 119th Legislature, FIRST REGULAR Session

	Example 5: Debtor holds securities through a securities
account with Able & Co. Debtor's agreement with Able & Co.
provides that Able has a security interest in all securities
carried in the account as security for any obligations of Debtor
to Able. Debtor borrows from Beta and grants Beta a security
interest in 1000 shares of XYZ Co. stock carried in the account.
Debtor, Able, and Beta enter into an agreement under which Debtor
will continue to receive dividends and distributions and will
continue to have the right to direct dispositions, but Beta will
also have the right to direct dispositions and receive the
proceeds. Debtor incurs obligations to Able and later defaults
on the obligations to Beta and Able. Both Beta and Able have
control, so the general control priority rule of paragraph (1)
[Maine cite subsection (1)] does not apply. Compare Example 4.
Paragraph (3) [Maine cite subsection (3)]provides that a security
interest held by a securities intermediary in positions of its
own customer has priority over a conflicting security interest of
an external lender, so Able has priority over Beta. (Paragraph
(4) [Maine cite subsection (4)] contains a parallel rule for
commodity intermediaries.) The agreement among Able, Beta, and
Debtor could, of course, determine the relative priority of the
security interests of Able and Beta, see Section 9339 [Maine cite
section 9-1339], but the fact that the intermediary has agreed to
act on the instructions of a secured party such as Beta does not
itself imply any agreement by the intermediary to subordinate.

5. Conflicting Security Interests Perfected by Control:
Temporal Priority. Former Section 9-115 introduced into Article
9 the concept of conflicting security interests that rank
equally. Paragraph (2) [Maine cite subsection (2)] of this
section governs priority in those circumstances in which more
than one secured party (other than a broker, securities
intermediary, or commodity intermediary) has control. It
replaces the equal-priority rule for conflicting security
interests in investment property with a temporal rule. For
securities, both certificated and uncertificated, under paragraph
(2)(A) [Maine cite subsection (2), paragraph (a)] priority is
based on the time that control is obtained. For security
entitlements carried in securities accounts, the treatment is
more complex. Paragraph (2)(B) [Maine site subsection (2),
paragraph (b)] bases priority on the timing of the steps taken to
achieve control. The following example illustrates the
application of paragraph (2) [Maine cite subsection (2)].

Example 6: Debtor borrows from Alpha and grants Alpha a
security interest in a variety of collateral, including all of
Debtor's investment property. At that time Debtor owns a
security entitlement that includes 1000 shares of XYZ Co. stock
that Debtor holds through a securities account with Able & Co.
Debtor, Able,
and Alpha enter into an agreement under which

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