409.328 Priority of security interests in investment property. The following rules govern priority among conflicting security interests in the same investment property:

(1) Control by secured party. A security interest held by a secured party having control of investment property under s. 409.106 has priority over a security interest held by a secured party that does not have control of the investment property.

(2) Priority in time of control. Except as otherwise provided in subs. (3) and (4), conflicting security interests held by secured parties each of which has control under s. 409.106 rank according to priority in time of:

(a) If the collateral is a security, obtaining control;

(b) If the collateral is a security entitlement carried in a securities account and:

1. If the secured party obtained control under s. 408.106 (4) (a), the secured party's becoming the person for which the securities account is maintained;

2. If the secured party obtained control under s. 408.106 (4) (b), the securities intermediary's agreement to comply with the secured party's entitlement orders with respect to security entitlements carried or to be carried in the securities account; or

3. If the secured party obtained control through another person under s. 408.106 (4) (c), the time on which priority would be based under this subsection if the other person were the secured party; or

(c) If the collateral is a commodity contract carried with a commodity intermediary, the satisfaction of the requirement for control specified in s. 409.106 (2) (b) with respect to commodity contracts carried or to be carried with the commodity intermediary.

(3) Priority of securities intermediary regarding entitlement or account. A security interest held by a securities intermediary in a security entitlement or a securities account maintained with the securities intermediary has priority over a conflicting security interest held by another secured party.

(4) Priority of securities intermediary regarding contract or account. A security interest held by a commodity intermediary in a commodity contract or a commodity account maintained with the commodity intermediary has priority over a conflicting security interest held by another secured party.

(5) Priority in certificated securities. A security interest in a certificated security in registered form which is perfected by taking delivery under s. 409.313 (1) and not by control under s. 409.314 has priority over a conflicting security interest perfected by a method other than control.

(6) Priority of conflicting security interests; intermediaries. Conflicting security interests created by a broker, securities intermediary, or commodity intermediary which are perfected without control under s. 409.106 rank equally.

(7) Priority of conflicting security interests; others. In all other cases, priority among conflicting security interests in investment property is governed by ss. 409.322 and 409.323.

History: 2001 a. 10.