§ 26-1-8.1-106 — Control by purchaser; certificated security, uncertificated security, or security entitlement; agreement by issuer or securities intermediary to comply with purchaser's orders or instructions

Indiana § 26-1-8.1-106

• Jurisdiction: Indiana
• Title 26: COMMERCIAL LAW
• Art. 1: UNIFORM COMMERCIAL CODE
• Ch. 8.1: Investment Securities

Text

(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 endorsed to the purchaser or in blank by an
effective endorsement; 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) has control even if the registered owner in the case of subsection
(c) or the entitlement holder in the case of subsection (d) retains the
right to make substitutions for the uncertificated security or security
entitlement, to originate instructions or entitlement orders to the issuer
or a 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) 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 chapter or IC 26-1-9.1 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

As added by P.L.247-1995, SEC.10. Amended by P.L.57-2000, SEC.40; P.L.199-2023, SEC.37.