§ 10:8-110 — Applicability; choice of law

§8-110. Applicability; choice of law
(a) The local law of the issuer's jurisdiction, as specified in subsection (d), governs:
(1) the validity of a security;
(2) the rights and duties of the issuer with respect to registration of transfer;
(3) the effectiveness of registration of transfer by the issuer;
(4) whether the issuer owes any duties to an adverse claimant to a security; and
(5) whether an adverse claim can be asserted against a person to whom transfer of
a certificated or uncertificated security is registered or a person who obtains control of an
uncertificated security.
(b) The local law of the securities intermediary's jurisdiction, as specified in
subsection (e), governs:
(1) acquisition of a security entitlement from the securities intermediary;
(2) the rights and duties of the securities intermediary and entitlement holder arising
out of a security entitlement;
(3) whether the securities intermediary owes any duties to an adverse claimant to a
security entitlement; and
(4) whether an adverse claim can be asserted against a person who acquires a security
entitlement from the securities intermediary or a person who purchases a security entitlement
or interest therein from an entitlement holder.
(c) The local law of the jurisdiction in which a security certificate is located at the
time of delivery governs whether an adverse claim can be asserted against a person to whom
the security certificate is delivered.
(d) "Issuer's jurisdiction" means the jurisdiction under which the issuer of the
security is organized or, if permitted by the law of that jurisdiction, the law of another
jurisdiction specified by the issuer. An issuer organized under the law of this State may
specify the law of another jurisdiction as the law governing the matters specified in
subsection (a)(2) through (5).
(e) The following rules determine a "securities intermediary's jurisdiction" for
purposes of this section:
(1) If an agreement between the securities intermediary and its entitlement holder
governing the securities account expressly provides that a particular jurisdiction is the
securities intermediary's jurisdiction for purposes of this Part, this Chapter, or this Title, that
jurisdiction is the securities intermediary's jurisdiction.
(2) If paragraph (1) does not apply and an agreement between the securities
intermediary and its entitlement holder expressly provides that the agreement is governed by
the law of a particular jurisdiction, that jurisdiction is the securities intermediary's
jurisdiction.
(3) If neither paragraph (1) nor paragraph (2) applies and an agreement between the
securities intermediary and its entitlement holder governing the securities account expressly
provides that the securities account is maintained at an office in a particular jurisdiction, that
jurisdiction is the securities intermediary's jurisdiction.
(4) If none of the preceding paragraphs apply, the securities intermediary's
jurisdiction is the jurisdiction in which the office identified in an account statement as the
office serving the entitlement holder's account is located.
(5) If none of the preceding paragraphs apply, the securities intermediary's
jurisdiction is the jurisdiction in which the chief executive office of the securities
intermediary is located.
(f) A securities intermediary's jurisdiction is not determined by the physical location
of certificates representing financial assets, or by the jurisdiction in which is organized the
issuer of the financial asset with respect to which an entitlement holder has a security
entitlement, or by the location of facilities for data processing or other record keeping
concerning the account.
(g) The local law of the issuer's jurisdiction or the securities intermediary's
jurisdiction governs a matter or transaction specified in Subsection (a) or (b) of this Section
even if the matter or transaction does not bear any relation to the jurisdiction.

Legislative History

Acts 1995, No. 884, §1, eff. Jan. 1, 1996; Acts 2001, No. 128, §9, eff. July 1, 2001; Acts 2024, No. 773, §1.