12A:8-103 Rule for determining whether certain obligations and interests are securities or financial assets.
12A:8-103. Rule for Determining whether Certain Obligations and Interests are Securities or Financial Assets.
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 chapter, 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 chapter and not by chapter 3, even though it also meets the requirements of that chapter. However, a negotiable instrument governed by chapter 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 12A:9-102(a)(15), is not a security or a financial asset.
g.A document of title is not a financial asset unless 12A:8-102(a)(9)(c) applies.
L.1997, c.252, s.1; amended 2001, c.117, s.17; 2001, c.386, s.133; 2013, c.65, s.47.
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Last modified: October 11, 2016