8.8A-107 - A-107. Whether endorsement, instruction or entitlement order is effective.
§ 8.8A-107. Whether endorsement, instruction or entitlement order iseffective.
(a) "Appropriate person" means:
(1) with respect to an endorsement, the person specified by a securitycertificate or by an effective special endorsement to be entitled to thesecurity;
(2) with respect to an instruction, the registered owner of an uncertificatedsecurity;
(3) with respect to an entitlement order, the entitlement holder;
(4) if the person designated in paragraph (1), (2), or (3) is deceased, thedesignated person's successor taking under other law or the designatedperson's personal representative acting for the estate of the decedent; or
(5) if the person designated in paragraph (1), (2), or (3) lacks capacity,the designated person's guardian, conservator, or other similarrepresentative who has power under other law to transfer the security orfinancial asset.
(b) An endorsement, instruction, or entitlement order is effective if:
(1) it is made by the appropriate person;
(2) it is made by a person who has power under the law of agency to transferthe security or financial asset on behalf of the appropriate person,including, in the case of an instruction or entitlement order, a person whohas control under § 8.8A-106 (c) (2) or (d) (2); or
(3) the appropriate person has ratified it or is otherwise precluded fromasserting its ineffectiveness.
(c) An endorsement, instruction, or entitlement order made by arepresentative is effective even if:
(1) the representative has failed to comply with a controlling instrument orwith the law of the state having jurisdiction of the representativerelationship, including any law requiring the representative to obtain courtapproval of the transaction; or
(2) the representative's action in making the endorsement, instruction, orentitlement order or using the proceeds of the transaction is otherwise abreach of duty.
(d) If a security is registered in the name of or specially endorsed to aperson described as a representative, or if a securities account ismaintained in the name of a person described as a representative, anendorsement, instruction, or entitlement order made by the person iseffective even though the person is no longer serving in the describedcapacity.
(e) Effectiveness of an endorsement, instruction, or entitlement order isdetermined as of the date the endorsement, instruction, or entitlement orderis made, and an endorsement, instruction, or entitlement order does notbecome ineffective by reason of any later change of circumstances.
(1996, c. 216.)