8.8A-102 - A-102. Definitions.
§ 8.8A-102. Definitions.
(a) In this title:
(1) "Adverse claim" means a claim that a claimant has a property interestin a financial asset and that it is a violation of the rights of the claimantfor another person to hold, transfer, or deal with the financial asset.
(2) "Bearer form," as applied to a certificated security, means a form inwhich the security is payable to the bearer of the security certificateaccording to its terms but not by reason of an endorsement.
(3) "Broker" means a person defined as a broker or dealer under the federalsecurities laws, but without excluding a bank acting in that capacity.
(4) "Certificated security" means a security that is represented by acertificate.
(5) "Clearing corporation" means:
(i) a person that is registered as a "clearing agency" under the federalsecurities laws;
(ii) a federal reserve bank; or
(iii) any other person that provides clearance or settlement services withrespect to financial assets that would require it to register as a clearingagency under the federal securities laws but for an exclusion or exemptionfrom 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 the personstransmitting and receiving the information.
(7) "Entitlement holder" means a person identified in the records of asecurities intermediary as the person having a security entitlement againstthe securities intermediary. If a person acquires a security entitlement byvirtue of § 8.8A-501 (b) (2) or (3), that person is the entitlement holder.
(8) "Entitlement order" means a notification communicated to a securitiesintermediary directing transfer or redemption of a financial asset to whichthe entitlement holder has a security entitlement.
(9) "Financial asset," except as otherwise provided in § 8.8A-103, means:
(i) a security;
(ii) an obligation of a person or a share, participation, or other interestin a person or in property or an enterprise of a person, which is, or is of atype, dealt in or traded on financial markets, or which is recognized in anyarea in which it is issued or dealt in as a medium for investment; or
(iii) any property that is held by a securities intermediary for anotherperson in a securities account if the securities intermediary has expresslyagreed with the other person that the property is to be treated as afinancial asset under this title.
As context requires, the term means either the interest itself or the meansby which a person's claim to it is evidenced, including a certificated oruncertificated security, a security certificate, or a security entitlement.
(10) "Good faith," for purposes of the obligation of good faith in theperformance or enforcement of contracts or duties within this title, meanshonesty in fact and the observance of reasonable commercial standards of fairdealing.
(11) "Endorsement" means a signature that alone or accompanied by otherwords is made on a security certificate in registered form or on a separatedocument for the purpose of assigning, transferring, or redeeming thesecurity or granting a power to assign, transfer, or redeem it.
(12) "Instruction" means a notification communicated to the issuer of anuncertificated security which directs that the transfer of the security beregistered or that the security be redeemed.
(13) "Registered form," as applied to a certificated security, means a formin 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 forthat purpose by or on behalf of the issuer, or the security certificate sostates.
(14) "Securities intermediary" means:
(i) a clearing corporation; or
(ii) a person, including a bank or broker, that in the ordinary course of itsbusiness maintains securities accounts for others and is acting in thatcapacity.
(15) "Security," except as otherwise provided in § 8.8A-103, means anobligation of an issuer or a share, participation, or other interest in anissuer or in property or an enterprise of an issuer:
(i) which is represented by a security certificate in bearer or registeredform, or the transfer of which may be registered upon books maintained forthat purpose by or on behalf of the issuer;
(ii) which is one of a class or series or by its terms is divisible into aclass or series of shares, participations, interests, or obligations; and
(iii) which:
(A) is, or is of a type, dealt in or traded on securities exchanges orsecurities markets; or
(B) is a medium for investment and by its terms expressly provides that it isa security governed by this title.
(16) "Security certificate" means a certificate representing a security.
(17) "Security entitlement" means the rights and property interest of anentitlement holder with respect to a financial asset specified in Part 5.
(18) "Uncertificated security" means a security that is not represented bya certificate.
(b) Other definitions applying to this title and the sections in which theyappear are:
Appropriate person § 8.8A-107
Control § 8.8A-106
Delivery § 8.8A-301
Investment company security § 8.8A-103
Issuer § 8.8A-201
Overissue § 8.8A-210
Protected purchaser § 8.8A-303
Securities account § 8.8A-501
(c) In addition, Title 8.1A contains general definitions and principles ofconstruction and interpretation applicable throughout this title.
(d) The characterization of a person, business, or transaction for purposesof this title does not determine the characterization of the person,business, or transaction for purposes of any other law, regulation, or rule.
(1996, c. 216; 2003, c. 353.)