§12A-8-107. Whether Indorsement, Instruction, or Entitlement Order
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is Effective.
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
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
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 paragraph
(2)of subsection
or paragraph
(2)of subsection
(d)of Section 8-106 of
this title; 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. Added by Laws 1984, c. 76, § 8, eff. Nov. 1, 1984. Amended by Laws 1995, c. 242, § 7, eff. Feb. 1, 1996.