For indirect holdings in investment property, who has control automatically?

In the context of secured transactions, particularly regarding indirect holdings in investment property, the broker holding the securities automatically has control. This is because control over a securities account, which is defined under the Uniform Commercial Code (UCC), is granted to the broker when the debtor has established a securities account with that broker. The broker is in a position to act on instructions received from the debtor and manages the investments on their behalf.

When a creditor seeks a security interest in investment property, gaining control is a critical aspect as it enhances the creditor's rights and position in case of a debtor's default. In this scenario, the broker's role is pivotal; they maintain the securities account and, therefore, are considered to have control over the investment property held within it. This means that if a creditor is looking to secure a loan with such property, they typically need to ensure they obtain the necessary security interest by obtaining control from the broker.

The other choices do not have the same automatic control over the investment property. The debtor has the ownership of the securities but doesn’t inherently possess control without the broker's involvement. The creditor would need to take additional steps to gain control, such as by entering into an agreement with the broker. The issuer of the securities does not