State Codes and Statutes
Statutes > Utah > Title-70a > Chapter-08 > 70a-8-40370A-8-403. Demand that issuer not register transfer.
(1) A person who is an appropriate person to make an indorsement or originate aninstruction may demand that the issuer not register transfer of a security by communicating to theissuer a notification that identifies the registered owner and the issue of which the security is apart and provides an address for communications directed to the person making the demand. Thedemand is effective only if it is received by the issuer at a time and in a manner affording theissuer reasonable opportunity to act on it.
(2) If a certificated security in registered form is presented to an issuer with a request toregister transfer or an instruction is presented to an issuer with a request to register transfer of anuncertificated security after a demand that the issuer not register transfer has become effective,the issuer shall promptly communicate to:
(a) the person who initiated the demand at the address provided in the demand; and
(b) the person who presented the security for registration of transfer or initiated theinstruction requesting registration of transfer a notification stating that:
(i) the certificated security has been presented for registration of transfer or the instructionfor registration of transfer of the uncertificated security has been received;
(ii) a demand that the issuer not register transfer had previously been received; and
(iii) the issuer will withhold registration of transfer for a period of time stated in thenotification in order to provide the person who initiated the demand an opportunity to obtain legalprocess or an indemnity bond.
(3) The period described in Subsection (2)(b)(iii) may not exceed 30 days after the dateof communication of the notification. A shorter period may be specified by the issuer if it is notmanifestly unreasonable.
(4) An issuer is not liable to a person who initiated a demand that the issuer not registertransfer for any loss the person suffers as a result of registration of a transfer pursuant to aneffective indorsement or instruction if the person who initiated the demand does not, within thetime stated in the issuer's communication, either:
(a) obtain an appropriate restraining order, injunction, or other process from a court ofcompetent jurisdiction enjoining the issuer from registering the transfer; or
(b) file with the issuer an indemnity bond, sufficient in the issuer's judgment to protect theissuer and any transfer agent, registrar, or other agent of the issuer involved from any loss it orthey may suffer by refusing to register the transfer.
(5) This section does not relieve an issuer from liability for registering transfer pursuantto an indorsement or instruction that was not effective.
Repealed and Re-enacted by Chapter 204, 1996 General Session
