>>60641337โข Ownership of securities as property has been replaced with a new legal concept of a "security entitlement", which is a contractual claim assuring a very weak position if the account provider becomes insolvent.
โข All securities are held in un-segregated pooled form. Securities used as collateral, and those restricted from such use, are held in the same pool.
โข All account holders, including those who have prohibited use of their securities as collateral, must, by law, receive only a pro-rata share of residual assets.
โRe-vindication,โ i.e. the taking back of oneโs own securities in the event of insolvency, is absolutely prohibited.
โข Account providers may legally borrow pooled securities to collateralize proprietary trading and financing.
โข "Safe Harbor" assures secured creditors priority claim to pooled securities ahead of account holders.
โข The absolute priority claim of secured creditors to pooled client securities has been upheld by the courts.