>>60641337
• 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.
• 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.
• 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.
“Re-vindication,” i.e. the taking back of one’s own securities in the event of insolvency, is absolutely prohibited.
• Account providers may legally borrow pooled securities to collateralize proprietary trading and financing.
• "Safe Harbor" assures secured creditors priority claim to pooled securities ahead of account holders.
• The absolute priority claim of secured creditors to pooled client securities has been upheld by the courts.