70A-8-105 - Control.
70A-8-105. Control.
(1) A purchaser has "control" of a certificated security in bearer form if the certificatedsecurity is delivered to the purchaser.
(2) A purchaser has "control" of a certificated security in registered form if thecertificated security is delivered to the purchaser, and:
(a) the certificate is indorsed to the purchaser or in blank by an effective indorsement; or
(b) the certificate is registered in the name of the purchaser, upon original issue orregistration of transfer by the issuer.
(3) A purchaser has "control" of an uncertificated security if:
(a) the uncertificated security is delivered to the purchaser; or
(b) the issuer has agreed that it will comply with instructions originated by the purchaserwithout further consent by the registered owner.
(4) A purchaser has "control" of a security entitlement if:
(a) the purchaser becomes the entitlement holder;
(b) the securities intermediary has agreed that it will comply with entitlement ordersoriginated by the purchaser without further consent by the entitlement holder; or
(c) another person has control of the security entitlement on behalf of the purchaser or,having previously acquired control of the security entitlement, acknowledges that it has control onbehalf of the purchaser.
(5) If an interest in a security entitlement is granted by the entitlement holder to theentitlement holder's own securities intermediary, the securities intermediary has control.
(6) A purchaser who has satisfied the requirements of Subsection (3)(b) or (4)(b) hascontrol even if the registered owner in the case of Subsection (3)(b) or the entitlement holder inthe case of Subsection (4)(b) retains the right to make substitutions for the uncertificated securityor security entitlement, to originate instructions or entitlement orders to the issuer or securitiesintermediary, or otherwise to deal with the uncertificated security or security entitlement.
(7) An issuer or a securities intermediary may not enter into an agreement of the kinddescribed in Subsection (3)(b) or (4)(b) without the consent of the registered owner or entitlementholder, but an issuer or a securities intermediary is not required to enter into such an agreementeven though the registered owner or entitlement holder so directs. An issuer or securitiesintermediary that has entered into such an agreement is not required to confirm the existence ofthe agreement to another party unless requested to do so by the registered owner or entitlementholder.
Amended by Chapter 252, 2000 General Session