§ 25-8-103. Rules for determining whether certain obligations and interests are securities or financial assets.

352 words·~2 min read·/nc/chapter-25/25-8-103

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, 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 of this Chapter, even though it also meets the requirements of that Article. However, a negotiable instrument governed by Article 3 of this Chapter 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 G.S. 25-9-102, is not a security or financial asset.

(g)A document of title is not a financial asset unless G.S. 25-8-102(a)(9)c. applies.

(h)A controllable account, controllable electronic record, or controllable payment intangible is not a financial asset unless G.S. 25-8-102(a)(9)c. applies. (1941, c. 353, s. 15; G.S., s. 55-95; 1955, c. 1371, s. 2; 1965, c. 700, s. 1; 1989, c. 588, s. 1; 1997-181, s. 1; 1998-217, s. 5; 2000-169, s. 21; 2006-112, s. 43; 2025-25, s. 147.)