§ 8-103. Rules for determining whether certain obligations and interests are securities or financial assets.

296 words·~1 min read·/de/title-6/chapter-8/8-103

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

(a)A share or similar equity interest issued by a corporation, business trust, statutory trust, joint stock company, or similar entity is a security.

(b)An “investment company security” is a security. “Investment company security” means a share or similar equity interest issued by an entity that is registered as an investment company under the federal investment company laws, an interest in a unit investment trust that is so registered, or a face-amount certificate issued by a face-amount certificate company that is so registered. Investment company security does not include an insurance policy or endowment policy or annuity contract issued by an insurance company.

(c)An interest in a partnership or limited liability company is not a security unless it is dealt in or traded on securities exchanges or in securities markets, its terms expressly provide that it is a security governed by this Article, or it is an investment company security. However, an interest in a partnership or limited liability company is a financial asset if it is held in a securities account.

(d)A writing that is a security certificate is governed by this Article and not by Article 3, even though it also meets the requirements of that Article. However, a negotiable instrument governed by Article 3 is a financial asset if it is held in a securities account.

(e)An option or similar obligation issued by a clearing corporation to its participants is not a security, but is a financial asset.

(f)A commodity contract, as defined in Section 9-102(a)(15), is not a security or a financial asset.

(g)A document of title is not a financial asset unless Section 8-102(a)(9)(iii) applies.

(h)A controllable account, controllable electronic record, or controllable payment intangible is not a financial asset unless Section 8-102(a)(9)(iii) applies.