---
kind: "section"
citation: "31 C.F.R. § 354.3"
title: "31"
number: "354.3"
heading: "Law governing other interests."
url: "https://uscodex.org/cfr/31/354.3"
---

# §354.3. Law governing other interests.

- (a) To the extent not inconsistent with the regulations in this part, the law (not including the conflict-of-law rules) of a Securities Intermediary's jurisdiction governs:
  - (1) The acquisition of a Security Entitlement from the Securities Intermediary;
  - (2) The rights and duties of the Securities Intermediary and Entitlement Holder arising out of a Security Entitlement;
  - (3) Whether the Securities Intermediary owes any duties to an adverse claimant to a Security Entitlement;
  - (4) Whether an Adverse Claim can be asserted against a Person who acquires a Security Entitlement from the Securities Intermediary or a Person who purchases a Security Entitlement or interest therein from an Entitlement Holder; and
  - (5) Except as otherwise provided in [paragraph (c)](#c) of this section, the perfection, effect of perfection or non-perfection and priority of a security interest in a Security Entitlement.
- (b) **The following rules determine a “Securities Intermediary's jurisdiction” for purposes of this section—**
  - (1) If an agreement between the Securities Intermediary and its Entitlement Holder specifies that it is governed by the law of a particular jurisdiction, that jurisdiction is the Securities Intermediary's jurisdiction.
  - (2) If an agreement between the Securities Intermediary and its Entitlement Holder does not specify the governing law as provided in [paragraph (b)(1)](#b-1) of this section, but expressly specifies that the securities account is maintained at an office in a particular jurisdiction, that jurisdiction is the Securities Intermediary's jurisdiction.
  - (3) If an agreement between the Securities Intermediary and its Entitlement Holder does not specify a jurisdiction as provided in paragraph [(b)(1)](#b-1) or [(b)(2)](#b-2) of this section, the Securities Intermediary's jurisdiction is the jurisdiction in which is located the office identified in an account statement as the office serving the Entitlement Holder's account.
  - (4) If an agreement between the Securities Intermediary and its Entitlement Holder does not specify a jurisdiction as provided in paragraph [(b)(1)](#b-1) or [(b)(2)](#b-2) of this section and an account statement does not identify an office serving the Entitlement Holder's account as provided in [paragraph (b)(3)](#b-3) of this section, the Securities Intermediary's jurisdiction is the jurisdiction in which is located the chief executive office of the Securities Intermediary.
- (c) Notwithstanding the general rule in [paragraph (a)(5)](#a-5) of this section, 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.
- (d) If the jurisdiction specified in [paragraph (b)](#b) of this section is a State that has not adopted Revised Article 8 (incorporated by reference, see [§ 354.1](/cfr/31/354.1.md)), then the law for the matters specified in [paragraph (a)](#a) of this section shall be the law of that State as though Revised Article 8 had been adopted by that State. For purposes of the application of the matters specified in [paragraph (a)](#a) of this section, the Federal Reserve Bank maintaining the Participant's Securities Account is a clearing corporation, and the Participant's interest in a Book-entry Security is a Security Entitlement.

## Notes

### Authority

Authority: 12 U.S.C. 391; 20 U.S.C. 1087-2(m).

### Source

Source: 62 FR 622, Jan. 6, 1997, unless otherwise noted.