<P> The rights created through these links, are purely contractual claims: these rights are of two kinds: </P> <P> 1) For the links where the account holder is itself an account provider at a lower tier, the right on the security during the time where it is credited there is characterized as a "securities entitlement", which is an "ad hoc" concept invented in 1994: i.e. designating a claim that will enable the account holder to take part to a prorate distribution in the event of bankruptcy of its account provider . </P> <P> 2) For the last link of the chain, in which the account holder is at the same time the final investor, its "security entitlement" is enriched by the "substantial" rights defined by the issuer: the right to receive dividends or interests and, possibly, the right to take part in the general meetings, when that was laid down in the account agreement concluded with the account provider . The combination of these reduced material rights and of these variable substantial rights is characterised by article 8 of the UCC as a "beneficial interest". </P> <P> This decomposition of the rights organized by Article 8 of the UCC results in preventing the investor to revindicate the security in case of bankruptcy of the account provider, that is to say the possibility to claim the security as its own asset, without being obliged to share it at its prorate value with the other creditors of the account provider . As a consequence, it also prevents the investor from asserting its securities at the upper level of the holding chain, either up to the DTC or up to a sub-custodian . Such a "security entitlement," unlike a normal ownership right, is no longer enforceable "erga omnes" to any person supposed to have the security in its custody . The "security entitlement" is a mere relative right, therefore a contractual right . </P>

The uniform commercial code (ucc) has been adopted in all 50 states