8.8A-106 - A-106. Control.
§ 8.8A-106. Control.
(a) A purchaser has "control" of a certificated security in bearer form ifthe certificated security is delivered to the purchaser.
(b) A purchaser has "control" of a certificated security in registered formif the certificated security is delivered to the purchaser, and:
(1) the certificate is endorsed to the purchaser or in blank by an effectiveendorsement; or
(2) the certificate is registered in the name of the purchaser, upon originalissue or registration of transfer by the issuer.
(c) A purchaser has "control" of an uncertificated security if:
(1) the uncertificated security is delivered to the purchaser; or
(2) the issuer has agreed that it will comply with instructions originated bythe purchaser without further consent by the registered owner.
(d) A purchaser has "control" of a security entitlement if:
(1) the purchaser becomes the entitlement holder;
(2) the securities intermediary has agreed that it will comply withentitlement orders originated by the purchaser without further consent by theentitlement holder; or
(3) another person has control of the security entitlement on behalf of thepurchaser or, having previously acquired control of the security entitlement,acknowledges that it has control on behalf of the purchaser.
(e) If an interest in a security entitlement is granted by the entitlementholder to the entitlement holder's own securities intermediary, thesecurities intermediary has control.
(f) A purchaser who has satisfied the requirements of subsection (c) or (d)has control even if the registered owner in the case of subsection (c) or theentitlement holder in the case of subsection (d) retains the right to makesubstitutions for the uncertificated security or security entitlement, tooriginate instructions or entitlement orders to the issuer or securitiesintermediary, or otherwise to deal with the uncertificated security orsecurity entitlement.
(g) An issuer or a securities intermediary may not enter into an agreement ofthe kind described in subsection (c) (2) or (d) (2) without the consent ofthe registered owner or entitlement holder, but an issuer or a securitiesintermediary is not required to enter into such an agreement even though theregistered owner or entitlement holder so directs. An issuer or securitiesintermediary that has entered into such an agreement is not required toconfirm the existence of the agreement to another party unless requested todo so by the registered owner or entitlement holder.
(1996, c. 216; 2000, c. 1007.)