§ 4-8-106 — Control

(a) A purchaser has control of a certificated security in
bearer form if the certificated security is delivered to the purchaser.

(b) A purchaser has control of a certificated security in registered form if
the certificated security is delivered to the purchaser, and:

(1) The certificate is indorsed to the purchaser or in blank by an effective
indorsement; or

(2) The certificate is registered in the name of the purchaser, upon original
issue or registration of transfer by the issuer.

(c) A purchaser has control of an uncertificated security if:

(1) The uncertificated security is delivered to the purchaser; or

(2) The issuer has agreed that it will comply with instructions originated by
the purchaser without further consent by the registered owner.

(d) A purchaser has control of a security entitlement if:

(1) The purchaser becomes the entitlement holder;

(2) The securities intermediary has agreed that it will comply with
entitlement orders originated by the purchaser without further consent by the
entitlement holder; or

(3) Another person, other than the transferor to the purchaser of an interest
in the security entitlement:

(A) Has control of the security entitlement and acknowledges that it has
control on behalf of the purchaser; or

(B) Obtains control of the security entitlement after having acknowledged
that it will obtain control of the security entitlement on behalf of the purchaser.

(e) If an interest in a security entitlement is granted by the entitlement
holder to the entitlement holder's own securities intermediary, the securities
intermediary has control.

(f) A purchaser who has satisfied the requirements of subsection (c) or (d) of
this section has control even if the registered owner in the case of subsection (c) of
this section or the entitlement holder in the case of subsection (d) of this section
retains the right to make substitutions for the uncertificated security or security
entitlement, to originate instructions or entitlement orders to the issuer or
securities intermediary, or otherwise to deal with the uncertificated security or
security entitlement.

(g) An issuer or a securities intermediary may not enter into an agreement of
the kind described in subsection (c)(2) or (d)(2) of this section without the consent
of the registered owner or entitlement holder, but an issuer or a securities
intermediary is not required to enter into such an agreement even though the
registered owner or entitlement holder so directs. An issuer or securities
intermediary that has entered into such an agreement is not required to confirm the
existence of the agreement to another party unless requested to do so by the
registered owner or entitlement holder.

(h) A person that has control under this section is not required to
acknowledge that it has control on behalf of a purchaser.

(i) If a person acknowledges that it has or will obtain control on behalf of a
purchaser, unless the person otherwise agrees or law other than this article 8 or
article 9 of this title 4 otherwise provides, the person does not owe any duty to the
purchaser and is not required to confirm the acknowledgment to any other person.

Legislative History

Source: L. 96: Entire article R&RE, p. 208, � 2, effective July 1. L. 2001: (d) and (f) amended, p. 1442, � 31, effective July 1. L. 2023: (d)(3) amended and (h) and (i) added, (SB 23-090), ch. 136, p. 538, � 39, effective August 7.