Figure 38'2 The Indirect Holding System

1
Figure 38.2The Indirect Holding System
Issuer
100,000 Shares
DTC
30,000 Shares
70,000 Shares
Broker 1
Bank
1,000 Shares
50,000 Shares
Investor 1
Broker 2
1,000 Shares
Investor 2
Note 1 DTC owns a security (UCC
8-102(a)(15)) represented by a security
certificate (UCC 8-102(a)(16)) in DTCs
possession. There are no other
security certificates in this scenario none of
the other parties own securities. Note 2
DTC is a securities intermediary (UCC
8-102(a)(14)) with respect to
security entitlements (UCC 8-102(a)(17))
held by Broker 1 and Bank as
entitlement holders (UCC 8-102(a)(7)). Note
3 Broker 1, in turn, is a securities
intermediary with respect to a security
entitlement held by Investor 1 as
entitlement holder. In the same way,
Bank is a securities intermediary with
respect to a security entitlement
held by Broker 2 as entitlement holder, and
Broker 2 is a securities
intermediary with respect to a security
entitlement hold by Investor 2 as
entitlement holder.