47-8501. Securities account; acquisition of
security entitlement from securities intermediary
A. "Securities account" means an account to which a financial asset is or may be
credited in accordance with an agreement under which the person maintaining the account
undertakes to treat the person for whom the account is maintained as entitled to exercise
the rights that comprise the financial asset.
B. Except as otherwise provided in subsections D and E, a person acquires a
security entitlement if a securities intermediary:
1. Indicates by book entry that a financial asset has been credited to the
person's securities account;
2. Receives a financial asset from the person or acquires a financial asset for the
person and, in either case, accepts it for credit to the person's securities account; or
3. Becomes obligated under another law, regulation or rule to credit a financial
asset to the person's securities account.
C. If a condition of subsection B has been met, a person has a security entitlement
even though the securities intermediary does not itself hold the financial asset.
D. If a securities intermediary holds a financial asset for another person, and the
financial asset is registered in the name of, payable to the order of, or specially
indorsed to the other person, and has not been indorsed to the securities intermediary or
in blank, the other person is treated as holding the financial asset directly rather than
as having a security entitlement with respect to the financial asset.
E. Issuance of a security is not establishment of a security entitlement.
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