§ 6A-8-102 - Definitions.
SECTION 6A-8-102
§ 6A-8-102 Definitions. – (a) In this chapter:
(1) "Adverse claim" means a claim that a claimant has aproperty interest in a financial asset and that it is a violation of the rightsof the claimant for another person to hold, transfer, or deal with thefinancial asset.
(2) "Bearer form," as applied to a certificated security,means a form in which the security is payable to the bearer of the securitycertificate according to its terms but not by reason of an indorsement.
(3) "Broker" means a person defined as a broker or dealerunder the federal securities laws, but without excluding a bank acting in thatcapacity.
(4) "Certificated security" means a security that isrepresented by a certificate.
(5) "Clearing corporation" means:
(i) a person that is registered as a "clearing agency" underthe federal securities laws;
(ii) A federal reserve bank; or
(iii) Any other person that provides clearance or settlementservices with respect to financial assets that would require it to register asa clearing agency under the federal securities laws but for an exclusion orexemption from the registration requirement, if its activities as a clearingcorporation, including promulgation of rules, are subject to regulation by afederal or state governmental authority.
(6) "Communicate" means to:
(i) Send a signed writing; or
(ii) Transmit information by any mechanism agreed upon by thepersons transmitting and receiving the information.
(7) "Entitlement holder" means a person identified in therecords of a securities intermediary as the person having a securityentitlement against the securities intermediary. If a person acquires asecurity entitlement by virtue of § 6A-8-501(b)(2) or (3), that person isthe entitlement holder.
(8) "Entitlement order" means a notification communicated toa securities intermediary directing transfer or redemption of a financial assetto which the entitlement holder has a security entitlement.
(9) "Financial asset," except as otherwise provided in §6A-8-103, means:
(i) A security;
(ii) An obligation of a person or a share, participation, orother interest in a person or in property or an enterprise of a person, whichis, or is of a type, dealt in or traded on financial markets, or which isrecognized in any area in which it is issued or dealt in as a medium forinvestment; or
(iii) Any property that is held by a securities intermediaryfor another person in a securities account if the securities intermediary hasexpressly agreed with the other person that the property is to be treated as afinancial asset under this chapter.
As context requires, the term means either the interestitself or the means by which a person's claim to it is evidenced, including acertificated or uncertificated security, a security certificate, or a securityentitlement.
(10) "Good faith," for purposes of the obligation of goodfaith in the performance or enforcement of contracts or duties within thischapter, means honesty in fact and the observance of reasonable commercialstandards of fair dealing.
(11) "Indorsement" means a signature that alone oraccompanied by other words is made on a security certificate in registered formor on a separate document for the purpose of assigning, transferring, orredeeming the security or granting a power to assign, transfer, or redeem it.
(12) "Instruction" means a notification communicated to theissuer of an uncertificated security which directs that the transfer of thesecurity be registered or that the security be redeemed.
(13) "Registered form," as applied to a certificatedsecurity, means a form in which:
(i) The security certificate specifies a person entitled tothe security; and
(ii) A transfer of the security may be registered upon booksmaintained for that purpose by or on behalf of the issuer, or the securitycertificate so states.
(14) "Securities intermediary" means:
(i) A clearing corporation; or
(ii) A person, including a bank or broker, that in theordinary course of its business maintains securities accounts for others and isacting in that capacity.
(15) "Security," except as otherwise provided in §6A-8-103, means an obligation of an issuer or a share, participation, or otherinterest in an issuer or in property or an enterprise of an issuer:
(i) Which is represented by a security certificate in beareror registered form, or the transfer of which may be registered upon booksmaintained for that purpose by or on behalf of the issuer;
(ii) Which is one of a class or series or by its terms isdivisible into a class or series of shares, participations, interests, orobligations; and
(iii) Which:
(A) Is, or is of a type, dealt in or traded on securitiesexchanges or securities markets; or
(B) Is a medium for investment and by its terms expresslyprovides that it is a security governed by this chapter.
(16) "Security certificate" means a certificate representinga security.
(17) "Security entitlement" means the rights and propertyinterest of an entitlement holder with respect to a financial asset specifiedin part 5 of this chapter.
(18) "Uncertificated security" means a security that is notrepresented by a certificate.
(b) Other definitions applying to this chapter and thesections in which they appear are:
Appropriate person § 6A-8-107
Control § 6A-8-106
Delivery § 6A-8-301
Investment company security § 6A-8-103
Issuer § 6A-8-201
Overissue § 6A-8-210
Protected purchaser § 6A-8-303
Securities account § 6A-8-501
(c) In addition, chapter 1 of this title contains generaldefinitions and principles of construction and interpretation applicablethroughout this chapter.
(d) The characterization of a person, business, ortransaction for purposes of this chapter does not determine thecharacterization of the person, business, or transaction for purposes of anyother law, regulation, or rule.