§ 41-08-06 — (8-106) Control

North Dakota § 41-08-06

• Jurisdiction: North Dakota
• Title 41: Uniform Commercial Code
• Ch. 41-08: Investment Securities

Text

1. A purchaser has "control" of a certificated security in bearer form if the certificated
security is delivered to the purchaser.
2. A purchaser has "control" of a certificated security in registered form if the certificated
security is delivered to the purchaser and:
a. The certificate is endorsed to the purchaser or in blank by an effective
endorsement; or
b. The certificate is registered in the name of the purchaser, upon original issue or
registration 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
purchaser without 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 orders
originated by the purchaser without further consent by the entitlement holder; or
c. Another person, other than the transferor to the purchaser of an interest in the
security entitlement:
(1) Has control of the security entitlement and acknowledges that it has control
on behalf of the purchaser; or
(2) Obtains control of the security entitlement after having acknowledged that it
will obtain control of the security entitlement on behalf of the purchaser.
5. 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.
6. A purchaser who has satisfied the requirements of subsection 3 or 4 has control, even
if the registered owner in the case of subsection 3 or the entitlement holder in the case
of subsection 4 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.
7. An issuer or a securities intermediary may not enter into an agreement of the kind
described in subdivision b of subsection 3 or subdivision b of subsection 4 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.
8. A person that has control under this section is not required to acknowledge that it has
control on behalf of a purchaser.
9. 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 chapter 41-09
otherwise provides, the person does not owe any duty to the purchaser and is not
required to confirm the acknowledgment to any other person.