[Code of Federal Regulations]
[Title 31, Volume 2]
[Revised as of July 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 31CFR357.11]

[Page 396-397]
 
                  TITLE 31--MONEY AND FINANCE: TREASURY
 
         CHAPTER II--FISCAL SERVICE, DEPARTMENT OF THE TREASURY
 
PART 357--REGULATIONS GOVERNING BOOK-ENTRY TREASURY BONDS, NOTES AND BILLS (DEPARTMENT OF THE TREASURY CIRCULAR, PUBLIC DEBT SERIES NO. 2-86)--Table of Contents
 
    Subpart B--Treasury/Reserve Automated Debt Entry System (TRADES)
 
Sec. 357.11  Laws governing other interests in Treasury securities.

    (a) What does the law (not including the conflict-of-law rules) of a 
Securities Intermediary's jurisdiction govern? To the extent not 
inconsistent with these regulations, the law (not including the 
conflict-of-law rules) of a Security Intermediary's jurisdiction governs 
the following:
    (1) When a Person acquires a Security Entitlement from the 
Securities Intermediary;
    (2) The rights and duties of the Securities Intermediary and 
Entitlement Holder that arise out of a Security Entitlement;
    (3) Whether the Securities Intermediary owes any duties to an 
adverse claimant to a Security Entitlement;
    (4) Whether a Person may assert an Adverse Claim against a Person 
who acquires a Security Entitlement from the Securities Intermediary or 
against a Person who purchases a Security Entitlement or interest 
therein from an Entitlement Holder; and
    (5) The perfection, effect of perfection or non-perfection and 
priority of a security interest in a Security Entitlement (except as 
otherwise provided in paragraph (c) of this section).
    (b) What is the ``Securities Intermediary's jurisdiction'' for 
purposes of this section? See the following table:

------------------------------------------------------------------------
                                                    Then the securities
                     If . . .                         intermediary's
                                                   jurisdiction is . . .
------------------------------------------------------------------------
(1) An agreement between the Securities           the jurisdiction
 Intermediary and its Entitlement Holder           agreed upon.
 governing the securities account expressly
 provides that a particular jurisdiction is the
 Securities Intermediary's jurisdiction for
 purposes of Part 1 of Article 8 of the Uniform
 Commercial Code, Article 8 of the Uniform
 Commercial Code, or the Uniform Commercial Code.
(2) An agreement between the Securities           the jurisdiction
 Intermediary and its Entitlement Holder           agreed upon.
 governing the securities account expressly
 provides that it is governed by the law of a
 particular jurisdiction.
(3) The statements in paragraphs (b)(1) and (2)   the jurisdiction where
 of this table do not apply, but the agreement     the office is
 expressly specifies that the securities account   located.
 is maintained at an office in a particular
 jurisdiction.
(4) The statements in paragraphs (b)(1) through   the jurisdiction where
 (3) of this table do not apply and an account     the office is
 statement identifies the office serving the       located.
 Entitlement Holder's account.
(5) None of the statements in paragraphs (b)(1)   the jurisdiction in
 through (4) of this table apply.                  which the chief
                                                   executive office of
                                                   the Securities
                                                   Intermediary is
                                                   located.
------------------------------------------------------------------------

    (c) What law governs the perfection of a security interest 
automatically or by filing? The law (but not the conflict-of-law rules) 
of the jurisdiction in which the Person creating a security interest is 
located governs whether and how the security interest may be perfected 
automatically or by filing a financing statement. (This is despite the 
general rule in (a)(5) of this section).
    (d) Where is a Person located, for purposes of paragraph (c) of this 
section? A Person's location is determined under state law, including 
Revised Article 9

[[Page 397]]

(incorporated by reference, see Sec. 357.2), as it may be amended from 
time to time.
    (e) What law governs if the jurisdiction in table (b) of this 
section did not adopt Revised Article 8 or Revised Article 8 as amended 
by Revised Article 9 (both incorporated by reference, see Sec. 357.2)? 
The law for the matters specified in paragraph (a) of this section shall 
be the law of that State as though the State adopted Revised Article 8.
    (f) What other rules apply? For purposes of the matters specified in 
paragraph (a) of this section, the Federal Reserve Bank maintaining the 
Securities Account is a clearing corporation and the Participant's 
interest in a Book-entry Security is a Security Entitlement.