Section 8--102. Definitions.
(a) In this Article:
(1) "Adverse claim" means a claim that a claimant has a property
interest in a financial asset and that it is a violation of
the rights of the claimant for another person to hold,
transfer, or deal with the financial asset.
(2) "Bearer form", as applied to a certificated security, means a
form in which the security is payable to the bearer of the
security certificate according to its terms but not by reason
of an indorsement.
(3) "Broker" means a person defined as a broker or dealer under
the federal securities laws, but without excluding a bank
acting in that capacity.
(4) "Certificated security" means a security that is represented
by a certificate.
(5) "Clearing corporation" means:
(i) a person that is registered as a "clearing agency"
pursuant to 15 United States Code 78-c(a)(23), as
from time to time amended;
(ii) a federal reserve bank; or
(iii) any other person that provides clearance or settlement
services with respect to financial assets that would
require it to register as a clearing agency under the
federal securities laws but for an exclusion or
exemption from the registration requirement, if its
activities as a clearing corporation, including
promulgation of rules, are subject to regulation by a
federal or state governmental authority.
(6) "Communicate" means to:
(i) send a signed writing; or
(ii) transmit information by any mechanism agreed upon by
the persons transmitting and receiving the information.
(7) "Entitlement holder" means a person identified in the records
of a securities intermediary as the person having a security
entitlement against the securities intermediary. If a person
acquires a security entitlement by virtue of Section
8--501(b)(2) or (3), that person is the entitlement holder.
(8) "Entitlement order" means a notification communicated to a
securities intermediary directing transfer or redemption of a
financial asset to which the entitlement holder has a
(9) "Financial asset", except as otherwise provided in Section
(i) a security;
(ii) an obligation of a person or a share, participation, or
other interest in a person or in property or an
enterprise of a person, which is, or is of a type,
dealt in or traded on financial markets, or which is
recognized in any area in which it is issued or dealt
in as a medium for investment; or
(iii) any property that is held by a securities intermediary
for another person in a securities account if the
securities intermediary has expressly agreed with the
other person that the property is to be treated as a
financial asset under this Article. As context
requires, the term means either the interest itself or
the means by which a person's claim to it is evidenced,
including a certificated or uncertificated security, a
security certificate, or a security entitlement.
(10) "Good faith", for purposes of the obligation of good faith in
the performance or enforcement of contracts or duties within
this Article, means honesty in fact and the observance of
reasonable commercial standards of fair dealing.
(11) "Indorsement" means a signature that alone or accompanied by
other words is made on a security certificate in registered
form or on a separate document for the purpose of assigning,
transferring, or redeeming the security or granting a power
to assign, transfer, or redeem it.
(12) "Instruction" means a notification communicated to the issuer
of an uncertificated security which directs that the transfer
of the security be registered or that the security be
(13) "Registered form", as applied to a certificated security,
means a form in which:
(i) the security certificate specifies a person entitled to
the security; and
(ii) a transfer of the security may be registered upon books
maintained for that purpose by or on behalf of the
issuer, or the security certificate so states.
(14) "Securities intermediary" means:
(i) a clearing corporation; or
(ii) a person, including a bank or broker, that in the
ordinary course of its business maintains securities
accounts for others and is acting in that capacity.
(15) "Security", except as otherwise provided in Section 8--103,
means an obligation of an issuer or a share, participation,
or other interest in an issuer or in property or an
enterprise of an issuer:
(i) which is represented by a security certificate in
bearer or registered form, or the transfer of which may
be registered upon books maintained for that purpose by
or on behalf of the issuer;
(ii) which is one of a class or series or by its terms is
divisible into a class or series of shares,
participations, interests, or obligations; and
(A) is, or is of a type, dealt in or traded on
securities exchanges or securities markets; or
(B) is a medium for investment and by its terms
expressly provides that it is a security governed
by this Article.
(16) "Security certificate" means a certificate representing a
(17) "Security entitlement" means the rights and property interest
of an entitlement holder with respect to a financial asset
specified in Part 5.
(18) "Uncertificated security" means a security that is not repre-
sented by a certificate.
(b) Other definitions applying to this Article and the sections in
which they appear are:
"Appropriate person". Section 8--107.
"Control". Section 8--106.
"Delivery". Section 8--301.
"Investment company security". Section 8--103.
"Issuer". Section 8--201.
"Overissue". Section 8--210.
"Protected purchaser". Section 8--303.
"Securities account". Section 8--501.
(c) In addition, Article 1 contains general definitions and principles of construction and interpretation applicable throughout this Article.
(d) The characterization of a person, business, or transaction for purposes of this Article does not determine the characterization of the person, business, or transaction for purposes of any other law, regulation, or rule.
(e) The following definitions in Article 9 apply to this article: Cooperative interest Section 9--102(a)(27-b) Cooperative organization Section 9--102(a)(27-c) Cooperative record Section 9--102(a)(27-e)
Last modified: February 3, 2019