47-8107

47-8107. Whether indorsement, instruction or
entitlement order is effective

A. "Appropriate person" means:

1. With respect to an indorsement, the person specified by a security certificate
or by an effective special indorsement to be entitled to the security;

2. With respect to an instruction, the registered owner of an uncertificated
security;

3. With respect to an entitlement order, the entitlement holder;

4. If the person designated in paragraph 1, 2 or 3 of this subsection is deceased,
the designated person's successor taking under other law or the designated person's
personal representative acting for the estate of the decedent; or

5. If the person designated in paragraph 1, 2 or 3 of this subsection lacks
capacity, the designated person's guardian, conservator or other similar representative
who has power under other law to transfer the security or financial asset.

B. An indorsement, instruction or entitlement order is effective if:

1. It is made by the appropriate person;

2. It is made by a person who has power under the law of agency to transfer the
security or financial asset on behalf of the appropriate person, including, in the case
of an instruction or entitlement order, a person who has control under section 47-8106,
subsection C, paragraph 2 or subsection D, paragraph 2; or

3. The appropriate person has ratified it or is otherwise precluded from asserting
its ineffectiveness.

C. An indorsement, instruction or entitlement order made by a representative is
effective even if:

1. The representative has failed to comply with a controlling instrument or with
the law of the state having jurisdiction of the representative relationship, including
any law requiring the representative to obtain court approval of the transaction; or

2. The representative's action in making the indorsement, instruction or
entitlement order or using the proceeds of the transaction is otherwise a breach of duty.

D. If a security is registered in the name of or specially indorsed to a person
described as a representative, or if a securities account is maintained in the name of a
person described as a representative, an indorsement, instruction or entitlement order
made by the person is effective even though the person is no longer serving in the
described capacity.

E. Effectiveness of an indorsement, instruction or entitlement order is determined
as of the date the indorsement, instruction or entitlement order is made, and an
indorsement, instruction or entitlement order does not become ineffective by reason of
any later change of circumstances.