109. Despite section 108, an entitlement holder’s rights with respect to a financial asset may be enforced against a purchaser of the financial asset, or rights in it, if
(1) bankruptcy or insolvency proceedings have been initiated by or against the securities intermediary;
(2) the securities intermediary does not have sufficient rights in the financial asset to satisfy the security entitlements of all of its entitlement holders to that financial asset; and
(3) the securities intermediary violated its obligations under section 116 by transferring rights in the financial asset to the purchaser.
A trustee or liquidator acting on behalf of all entitlement holders having security entitlements to a particular financial asset may exercise the entitlement holders’ rights. If the trustee or liquidator does not take action, the entitlement holders may each exercise their rights against the purchaser.
An action based on the entitlement holder’s rights with respect to a particular financial asset, however framed, may not be brought against any purchaser of a financial asset who purchases the financial asset for value, obtains control or possession of the financial asset, and does not act in collusion with the securities intermediary in violating the securities intermediary’s obligations under section 116.