Institutions that maintain and manage securities accounts for businesses and other customers perform a critical function for the securities and lending industries. These intermediaries, consisting primarily of investment managers, broker-dealers and banks, manage more than $62 trillion in assets for both individual and institutional clients.1 In so doing, they enable customers to hold and borrow against investment property.
UCC Article 8 provides what has been described as the “modern legal structure” for the system of holding securities through intermediaries.2 And through the interaction of Articles 8 and 9, the UCC both governs and facilitates the use of securities as collateral for obtaining credit.
