70A-8-101 - Definitions.
70A-8-101. Definitions.
(1) As used in this chapter:
(a) "Adverse claim" means a claim that a claimant has a property interest in a financialasset and that it is a violation of the rights of the claimant for another person to hold, transfer, ordeal with the financial asset.
(b) "Bearer form," as applied to a certificated security, means a form in which thesecurity is payable to the bearer of the security certificate according to its terms but not by reasonof an indorsement.
(c) "Broker" means a person defined as a broker or dealer under the federal securitieslaws, but without excluding a bank acting in that capacity.
(d) "Certificated security" means a security that is represented by a certificate.
(e) "Clearing corporation" means:
(i) a person that is registered as a "clearing agency" under the federal securities laws;
(ii) a federal reserve bank; or
(iii) any other person that provides clearance or settlement services with respect tofinancial assets that would require it to register as a clearing agency under the federal securitieslaws but for an exclusion or exemption from the registration requirement, if its activities as aclearing corporation, including promulgation of rules, are subject to regulation by a federal orstate governmental authority.
(f) "Communicate" means to:
(i) send a signed writing; or
(ii) transmit information by any mechanism agreed upon by the persons transmitting andreceiving the information.
(g) "Entitlement holder" means a person identified in the records of a securitiesintermediary as the person having a security entitlement against the securities intermediary. If aperson acquired a security entitlement by virtue of Subsection 70A-8-501(2)(b) or (c), that personis the entitlement holder.
(h) "Entitlement order" means a notification communicated to a securities intermediarydirecting transfer or redemption of a financial asset to which the entitlement holder has a securityentitlement.
(i) (i) "Financial asset," except as otherwise provided in Section 70A-8-102, means:
(A) a security;
(B) an obligation of a person or a share, participation, or other interest in a person or inproperty or an enterprise of a person, which is or is of a type, dealt in or traded on financialmarkets, or which is recognized in any area in which it is issued or dealt in as a medium forinvestment; or
(C) any property that is held by a securities intermediary for another person in asecurities account if that securities intermediary has expressly agreed with the other person thatthe property is to be treated as a financial asset under this chapter.
(ii) As context requires, the term means either the interest itself or the means by which aperson's claim to it is evidenced, including a certificated or uncertificated security, a securitycertificate, or a security entitlement.
(j) "Good faith," for purposes of the obligation of good faith in the performance orenforcement of contracts or duties within this chapter, means honesty in fact and the observanceof reasonable commercial standards of fair dealing.
(k) "Indorsement" means a signature that alone or accompanied by other words is madeon a security certificate in registered form or on a separate document for the purpose ofassigning, transferring, or redeeming the security or granting a power to assign, transfer, orredeem it.
(l) "Instruction" means a notification communicated to the issuer of an uncertificatedsecurity which directs that the transfer of the security be registered or that the security beredeemed.
(m) "Registered form," as applied to a certificated security, means a form in which:
(i) the security certificate specifies a person entitled to the security; and
(ii) a transfer of the security may be registered upon books maintained for that purposeby or on behalf of the issuer, or the security certificate so states.
(n) "Securities intermediary" means:
(i) a clearing corporation; or
(ii) a person, including a bank or broker, that in the ordinary course of its businessmaintains securities accounts for others and is acting in that capacity.
(o) "Security," except as otherwise provided in Section 70A-8-102, means an obligationof an issuer or a share, participation, or other interest in an issuer or in property or an enterpriseof an issuer:
(i) which is represented by a security certificate in bearer or registered form, or thetransfer of which may be registered upon books maintained for that purpose by or on behalf ofthe issuer;
(ii) which is one of a class or series or by its terms is divisible into a class or series ofshares, participations, interests, or obligations; and
(iii) which:
(A) is, or is of a type, dealt in or traded on securities exchanges or securities markets; or
(B) is a medium for investment and by its terms expressly provides that it is a securitygoverned by this chapter.
(p) "Security certificate" means a certificate representing a security.
(q) "Security entitlement" means the rights and property interest of an entitlement holderwith respect to a financial asset specified in Part 5.
(r) "Uncertificated security" means a security that is not represented by a certificate.
(2) Other definitions applying to this chapter and the sections in which they appear are:
(a) "Appropriate person," Section 70A-8-106.
(b) "Control," Section 70A-8-105.
(c) "Delivery," Section 70A-8-301.
(d) "Investment company security," Section 70A-8-102.
(e) "Issuer," Section 70A-8-201.
(f) "Overissue," Section 70A-8-210.
(g) "Protected purchaser," Section 70A-8-303.
(h) "Securities account," Section 70A-8-501.
(3) In addition, Chapter 1a, Uniform Commercial Code - General Provisions, containsgeneral definitions and principles of construction and interpretation applicable throughout thischapter.
(4) The characterization of a person, business, or transaction for purposes of this chapterdoes not determine the characterization of the person, business, or transaction for purposes of any
other law, regulation, or rule.
Amended by Chapter 272, 2007 General Session