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18.8ACOMMERCIAL CODE — INVESTMENT SECURITIES1SHORT TITLE AND GENERAL MATTERS§ 8.8A-101Short title.<p>This title may be cited as Uniform Commercial Code -- Investment Securities.</p><p>1996, c. <a href='http://lis.virginia.gov/cgi-bin/legp604.exe?961+ful+CHAP0216'>216</a>.</p>
28.8ACOMMERCIAL CODE — INVESTMENT SECURITIES1SHORT TITLE AND GENERAL MATTERS§ 8.8A-104Acquisition of security or financial asset or interest therein.<p>(a) A person acquires a security or an interest therein, under this title, if:</p><p>(1) the person is a purchaser to whom a security is delivered pursuant to § <a href='http://law.lis.virginia.gov/vacode/8.8A-301/'>8.8A-301</a>; or</p><p>(2) the person acquires a security entitlement to the security pursuant to § <a href='http://law.lis.virginia.gov/vacode/8.8A-501/'>8.8A-501</a>.</p><p>(b) A person acquires a financial asset, other than a security, or an interest therein, under this title, if the person acquires a security entitlement to the financial asset.</p><p>(c) A person who acquires a security entitlement to a security or other financial asset has the rights specified in Part 5, but is a purchaser of any security, security entitlement, or other financial asset held by the securities intermediary only to the extent provided in § <a href='http://law.lis.virginia.gov/vacode/8.8A-503/'>8.8A-503</a>.</p><p>(d) Unless the context shows that a different meaning is intended, a person who is required by other law, regulation, rule, or agreement to transfer, deliver, present, surrender, exchange, or otherwise put in the possession of another person a security or financial asset satisfies that requirement by causing the other person to acquire an interest in the security or financial asset pursuant to subsection (a) or (b).</p><p>1996, c. <a href='http://lis.virginia.gov/cgi-bin/legp604.exe?961+ful+CHAP0216'>216</a>.</p>
38.8ACOMMERCIAL CODE — INVESTMENT SECURITIES1SHORT TITLE AND GENERAL MATTERS§ 8.8A-108Warranties in direct holding.<p>(a) A person who transfers a certificated security to a purchaser for value warrants to the purchaser, and an endorser, if the transfer is by endorsement, warrants to any subsequent purchaser, that:</p><p>(1) the certificate is genuine and has not been materially altered;</p><p>(2) the transferor or endorser does not know of any fact that might impair the validity of the security;</p><p>(3) there is no adverse claim to the security;</p><p>(4) the transfer does not violate any restriction on transfer;</p><p>(5) if the transfer is by endorsement, the endorsement is made by an appropriate person, or if the endorsement is by an agent, the agent has actual authority to act on behalf of the appropriate person; and</p><p>(6) the transfer is otherwise effective and rightful.</p><p>(b) A person who originates an instruction for registration of transfer of an uncertificated security to a purchaser for value warrants to the purchaser that:</p><p>(1) the instruction is made by an appropriate person, or if the instruction is by an agent, the agent has actual authority to act on behalf of the appropriate person;</p><p>(2) the security is valid;</p><p>(3) there is no adverse claim to the security; and</p><p>(4) at the time the instruction is presented to the issuer:</p><p>(i) the purchaser will be entitled to the registration of transfer;</p><p>(ii) the transfer will be registered by the issuer free from all liens, security interests, restrictions, and claims other than those specified in the instruction;</p><p>(iii) the transfer will not violate any restriction on transfer; and</p><p>(iv) the requested transfer will otherwise be effective and rightful.</p><p>(c) A person who transfers an uncertificated security to a purchaser for value and does not originate an instruction in connection with the transfer warrants that:</p><p>(1) the uncertificated security is valid;</p><p>(2) there is no adverse claim to the security;</p><p>(3) the transfer does not violate any restriction on transfer; and</p><p>(4) the transfer is otherwise effective and rightful.</p><p>(d) A person who endorses a security certificate warrants to the issuer that:</p><p>(1) there is no adverse claim to the security; and</p><p>(2) the endorsement is effective.</p><p>(e) A person who originates an instruction for registration of transfer of an uncertificated security warrants to the issuer that:</p><p>(1) the instruction is effective; and</p><p>(2) at the time the instruction is presented to the issuer the purchaser will be entitled to the registration of transfer.</p><p>(f) A person who presents a certificated security for registration of transfer or for payment or exchange warrants to the issuer that the person is entitled to the registration, payment, or exchange, but a purchaser for value and without notice of adverse claims to whom transfer is registered warrants only that the person has no knowledge of any unauthorized signature in a necessary endorsement.</p><p>(g) If a person acts as agent of another in delivering a certificated security to a purchaser, the identity of the principal was known to the person to whom the certificate was delivered, and the certificate delivered by the agent was received by the agent from the principal or received by the agent from another person at the direction of the principal, the person delivering the security certificate warrants only that the delivering person has authority to act for the principal and does not know of any adverse claim to the certificated security.</p><p>(h) A secured party who redelivers a security certificate received, or after payment and on order of the debtor delivers the security certificate to another person, makes only the warranties of an agent under subsection (g).</p><p>(i) Except as otherwise provided in subsection (g), a broker acting for a customer makes to the issuer and a purchaser the warranties provided in subsections (a) through (f). A broker that delivers a security certificate to its customer, or causes its customer to be registered as the owner of an uncertificated security, makes to the customer the warranties provided in subsection (a) or (b), and has the rights and privileges of a purchaser under this section. The warranties of and in favor of the broker acting as an agent are in addition to applicable warranties given by and in favor of the customer.</p><p>1996, c. <a href='http://lis.virginia.gov/cgi-bin/legp604.exe?961+ful+CHAP0216'>216</a>.</p>
48.8ACOMMERCIAL CODE — INVESTMENT SECURITIES1SHORT TITLE AND GENERAL MATTERS§ 8.8A-109Warranties in indirect holding.<p>(a) A person who originates an entitlement order to a securities intermediary warrants to the securities intermediary that:</p><p>(1) the entitlement order is made by an appropriate person, or if the entitlement order is by an agent, the agent has actual authority to act on behalf of the appropriate person; and</p><p>(2) there is no adverse claim to the security entitlement.</p><p>(b) A person who delivers a security certificate to a securities intermediary for credit to a securities account or originates an instruction with respect to an uncertificated security directing that the uncertificated security be credited to a securities account makes to the securities intermediary the warranties specified in § <a href='http://law.lis.virginia.gov/vacode/8.8A-108/'>8.8A-108</a> (a) or (b).</p><p>(c) If a securities intermediary delivers a security certificate to its entitlement holder or causes its entitlement holder to be registered as the owner of an uncertificated security, the securities intermediary makes to the entitlement holder the warranties specified in § <a href='http://law.lis.virginia.gov/vacode/8.8A-108/'>8.8A-108</a> (a) or (b).</p><p>1996, c. <a href='http://lis.virginia.gov/cgi-bin/legp604.exe?961+ful+CHAP0216'>216</a>.</p>
58.8ACOMMERCIAL CODE — INVESTMENT SECURITIES1SHORT TITLE AND GENERAL MATTERS§ 8.8A-111Clearing corporation rules.<p>A rule adopted by a clearing corporation governing rights and obligations among the clearing corporation and its participants in the clearing corporation is effective even if the rule conflicts with this act and affects another party who does not consent to the rule.</p><p>1996, c. <a href='http://lis.virginia.gov/cgi-bin/legp604.exe?961+ful+CHAP0216'>216</a>.</p>
68.8ACOMMERCIAL CODE — INVESTMENT SECURITIES1SHORT TITLE AND GENERAL MATTERS§ 8.8A-112Creditor's legal process.<p>(a) The interest of a debtor in a certificated security may be reached by a creditor only by actual seizure of the security certificate by the officer making the attachment or levy, except as otherwise provided in subsection (d). However, a certificated security for which the certificate has been surrendered to the issuer may be reached by a creditor by legal process upon the issuer.</p><p>(b) The interest of a debtor in an uncertificated security may be reached by a creditor only by legal process upon the issuer at its chief executive office in the United States, except as otherwise provided in subsection (d).</p><p>(c) The interest of a debtor in a security entitlement may be reached by a creditor only by legal process upon the securities intermediary with whom the debtor's securities account is maintained, except as otherwise provided in subsection (d).</p><p>(d) The interest of a debtor in a certificated security for which the certificate is in the possession of a secured party, or in an uncertificated security registered in the name of a secured party, or a security entitlement maintained in the name of a secured party, may be reached by a creditor by legal process upon the secured party.</p><p>(e) A creditor whose debtor is the owner of a certificated security, uncertificated security, or security entitlement is entitled to aid from a court of competent jurisdiction, by injunction or otherwise, in reaching the certificated security, uncertificated security, or security entitlement or in satisfying the claim by means allowed at law or in equity in regard to property that cannot readily be reached by other legal process.</p><p>1996, c. <a href='http://lis.virginia.gov/cgi-bin/legp604.exe?961+ful+CHAP0216'>216</a>.</p>
78.8ACOMMERCIAL CODE — INVESTMENT SECURITIES1SHORT TITLE AND GENERAL MATTERS§ 8.8A-113Statute of frauds inapplicable.<p>A contract or modification of a contract for the sale or purchase of a security is enforceable whether or not there is a writing signed or record authenticated by a party against whom enforcement is sought, even if the contract or modification is not capable of performance within one year of its making.</p><p>1996, c. <a href='http://lis.virginia.gov/cgi-bin/legp604.exe?961+ful+CHAP0216'>216</a>.</p>
88.8ACOMMERCIAL CODE — INVESTMENT SECURITIES1SHORT TITLE AND GENERAL MATTERS§ 8.8A-114Evidentiary rules concerning certificated securities.<p>The following rules apply in an action on a certificated security against the issuer:</p><p>(1) Unless specifically denied in the pleadings, each signature on a security certificate or in a necessary endorsement is admitted.</p><p>(2) If the effectiveness of a signature is put in issue, the burden of establishing effectiveness is on the party claiming under the signature, but the signature is presumed to be genuine or authorized.</p><p>(3) If signatures on a security certificate are admitted or established, production of the certificate entitles a holder to recover on it unless the defendant establishes a defense or a defect going to the validity of the security.</p><p>(4) If it is shown that a defense or defect exists, the plaintiff has the burden of establishing that the plaintiff or some person under whom the plaintiff claims is a person against whom the defense or defect cannot be asserted.</p><p>1996, c. <a href='http://lis.virginia.gov/cgi-bin/legp604.exe?961+ful+CHAP0216'>216</a>.</p>
98.8ACOMMERCIAL CODE — INVESTMENT SECURITIES1SHORT TITLE AND GENERAL MATTERS§ 8.8A-115Securities intermediary and others not liable to adverse claimant.<p>A securities intermediary that has transferred a financial asset pursuant to an effective entitlement order, or a broker or other agent or bailee that has dealt with a financial asset at the direction of its customer or principal, is not liable to a person having an adverse claim to the financial asset, unless the securities intermediary, or broker or other agent or bailee:</p><p>(1) took the action after it had been served with an injunction, restraining order, or other legal process enjoining it from doing so, issued by a court of competent jurisdiction, and had a reasonable opportunity to act on the injunction, restraining order, or other legal process; or</p><p>(2) acted in collusion with the wrongdoer in violating the rights of the adverse claimant; or</p><p>(3) in the case of a security certificate that has been stolen, acted with notice of the adverse claim.</p><p>1996, c. <a href='http://lis.virginia.gov/cgi-bin/legp604.exe?961+ful+CHAP0216'>216</a>.</p>
108.8ACOMMERCIAL CODE — INVESTMENT SECURITIES1SHORT TITLE AND GENERAL MATTERS§ 8.8A-116Securities intermediary as purchaser for value.<p>A securities intermediary that receives a financial asset and establishes a security entitlement to the financial asset in favor of an entitlement holder is a purchaser for value of the financial asset. A securities intermediary that acquires a security entitlement to a financial asset from another securities intermediary acquires the security entitlement for value if the securities intermediary acquiring the security entitlement establishes a security entitlement to the financial asset in favor of an entitlement holder.</p><p>1996, c. <a href='http://lis.virginia.gov/cgi-bin/legp604.exe?961+ful+CHAP0216'>216</a>.</p>
118.8ACOMMERCIAL CODE — INVESTMENT SECURITIES2ISSUE AND ISSUER§ 8.8A-203Staleness as notice of defect or defense.<p>After an act or event, other than a call that has been revoked, creating a right to immediate performance of the principal obligation represented by a certificated security or setting a date on or after which the security is to be presented or surrendered for redemption or exchange, a purchaser is charged with notice of any defect in its issue or defense of the issuer, if the act or event:</p><p>(1) requires the payment of money, the delivery of a certificated security, the registration of transfer of an uncertificated security, or any of them on presentation or surrender of the security certificate, the money or security is available on the date set for payment or exchange, and the purchaser takes the security more than one year after that date; or</p><p>(2) is not covered by paragraph (1) and the purchaser takes the security more than two years after the date set for surrender or presentation or the date on which performance became due.</p><p>1996, c. <a href='http://lis.virginia.gov/cgi-bin/legp604.exe?961+ful+CHAP0216'>216</a>.</p>
128.8ACOMMERCIAL CODE — INVESTMENT SECURITIES2ISSUE AND ISSUER§ 8.8A-204Effect of issuer's restriction on transfer.<p>A restriction on transfer of a security imposed by the issuer, even if otherwise lawful, is ineffective against a person without knowledge of the restriction unless:</p><p>(1) the security is certificated and the restriction is noted conspicuously on the security certificate; or</p><p>(2) the security is uncertificated and the registered owner has been notified of the restriction.</p><p>1996, c. <a href='http://lis.virginia.gov/cgi-bin/legp604.exe?961+ful+CHAP0216'>216</a>.</p>
138.8ACOMMERCIAL CODE — INVESTMENT SECURITIES2ISSUE AND ISSUER§ 8.8A-205Effect of unauthorized signature on security certificate.<p>An unauthorized signature placed on a security certificate before or in the course of issue is ineffective, but the signature is effective in favor of a purchaser for value of the certificated security if the purchaser is without notice of the lack of authority and the signing has been done by:</p><p>(1) an authenticating trustee, registrar, transfer agent, or other person entrusted by the issuer with the signing of the security certificate or of similar security certificates, or the immediate preparation for signing of any of them; or</p><p>(2) an employee of the issuer, or of any of the persons listed in paragraph (1), entrusted with responsible handling of the security certificate.</p><p>1996, c. <a href='http://lis.virginia.gov/cgi-bin/legp604.exe?961+ful+CHAP0216'>216</a>.</p>
148.8ACOMMERCIAL CODE — INVESTMENT SECURITIES2ISSUE AND ISSUER§ 8.8A-206Completion or alteration of security certificate.<p>(a) If a security certificate contains the signatures necessary to its issue or transfer but is incomplete in any other respect:</p><p>(1) any person may complete it by filling in the blanks as authorized; and</p><p>(2) even if the blanks are incorrectly filled in, the security certificate as completed is enforceable by a purchaser who took it for value and without notice of the incorrectness.</p><p>(b) A complete security certificate that has been improperly altered, even if fraudulently, remains enforceable, but only according to its original terms.</p><p>1996, c. <a href='http://lis.virginia.gov/cgi-bin/legp604.exe?961+ful+CHAP0216'>216</a>.</p>
158.8ACOMMERCIAL CODE — INVESTMENT SECURITIES2ISSUE AND ISSUER§ 8.8A-207Rights and duties of issuer with respect to registered owners.<p>(a) Before due presentment for registration of transfer of a certificated security in registered form or of an instruction requesting registration of transfer of an uncertificated security, the issuer or indenture trustee may treat the registered owner as the person exclusively entitled to vote, receive notifications, and otherwise exercise all the rights and powers of an owner.</p><p>(b) This title does not affect the liability of the registered owner of a security for a call, assessment, or the like.</p><p>1996, c. <a href='http://lis.virginia.gov/cgi-bin/legp604.exe?961+ful+CHAP0216'>216</a>.</p>
168.8ACOMMERCIAL CODE — INVESTMENT SECURITIES2ISSUE AND ISSUER§ 8.8A-208Effect of signature of authenticating trustee, registrar or transfer agent.<p>(a) A person signing a security certificate as authenticating trustee, registrar, transfer agent, or the like, warrants to a purchaser for value of the certificated security, if the purchaser is without notice of a particular defect, that:</p><p>(1) the certificate is genuine;</p><p>(2) the person's own participation in the issue of the security is within the person's capacity and within the scope of the authority received by the person from the issuer; and</p><p>(3) the person has reasonable grounds to believe that the certificated security is in the form and within the amount the issuer is authorized to issue.</p><p>(b) Unless otherwise agreed, a person signing under subsection (a) does not assume responsibility for the validity of the security in other respects.</p><p>1996, c. <a href='http://lis.virginia.gov/cgi-bin/legp604.exe?961+ful+CHAP0216'>216</a>.</p>
178.8ACOMMERCIAL CODE — INVESTMENT SECURITIES2ISSUE AND ISSUER§ 8.8A-209Issuer's lien.<p>A lien in favor of an issuer upon a certificated security is valid against a purchaser only if the right of the issuer to the lien is noted conspicuously on the security certificate.</p><p>1996, c. <a href='http://lis.virginia.gov/cgi-bin/legp604.exe?961+ful+CHAP0216'>216</a>.</p>
188.8ACOMMERCIAL CODE — INVESTMENT SECURITIES3TRANSFER OF CERTIFICATED AND UNCERTIFICATED SECURITIES§ 8.8A-301Delivery.<p>(a) Delivery of a certificated security to a purchaser occurs when:</p><p>(1) the purchaser acquires possession of the security certificate;</p><p>(2) another person, other than a securities intermediary, either acquires possession of the security certificate on behalf of the purchaser or, having previously acquired possession of the certificate, acknowledges that it holds for the purchaser; or</p><p>(3) a securities intermediary acting on behalf of the purchaser acquires possession of the security certificate, only if the certificate is in registered form and is (i) registered in the name of the purchaser, (ii) payable to the order of the purchaser, or (iii) specially endorsed to the purchaser by an effective endorsement and has not been endorsed to the securities intermediary or in blank.</p><p>(b) Delivery of an uncertificated security to a purchaser occurs when:</p><p>(1) the issuer registers the purchaser as the registered owner, upon original issue or registration of transfer; or</p><p>(2) another person, other than a securities intermediary, either becomes the registered owner of the uncertificated security on behalf of the purchaser or, having previously become the registered owner, acknowledges that it holds for the purchaser.</p><p>1996, c. <a href='http://lis.virginia.gov/cgi-bin/legp604.exe?961+ful+CHAP0216'>216</a>; 2000, c. <a href='http://lis.virginia.gov/cgi-bin/legp604.exe?001+ful+CHAP1007'>1007</a>.</p>
198.8ACOMMERCIAL CODE — INVESTMENT SECURITIES3TRANSFER OF CERTIFICATED AND UNCERTIFICATED SECURITIES§ 8.8A-302Rights of purchaser.<p>(a) Except as otherwise provided in subsections (b) and (c), a purchaser of a certificated or uncertificated security acquires all rights in the security that the transferor had or had power to transfer.</p><p>(b) A purchaser of a limited interest acquires rights only to the extent of the interest purchased.</p><p>(c) A purchaser of a certificated security who as a previous holder had notice of an adverse claim does not improve its position by taking from a protected purchaser.</p><p>1996, c. <a href='http://lis.virginia.gov/cgi-bin/legp604.exe?961+ful+CHAP0216'>216</a>; 2000, c. <a href='http://lis.virginia.gov/cgi-bin/legp604.exe?001+ful+CHAP1007'>1007</a>.</p>
208.8ACOMMERCIAL CODE — INVESTMENT SECURITIES3TRANSFER OF CERTIFICATED AND UNCERTIFICATED SECURITIES§ 8.8A-304Endorsement.<p>(a) An endorsement may be in blank or special. An endorsement in blank includes an endorsement to bearer. A special endorsement specifies to whom a security is to be transferred or who has power to transfer it. A holder may convert a blank endorsement to a special endorsement.</p><p>(b) An endorsement purporting to be only of part of a security certificate representing units intended by the issuer to be separately transferable is effective to the extent of the endorsement.</p><p>(c) An endorsement, whether special or in blank, does not constitute a transfer until delivery of the certificate on which it appears or, if the endorsement is on a separate document, until delivery of both the document and the certificate.</p><p>(d) If a security certificate in registered form has been delivered to a purchaser without a necessary endorsement, the purchaser may become a protected purchaser only when the endorsement is supplied. However, against a transferor, a transfer is complete upon delivery and the purchaser has a specifically enforceable right to have any necessary endorsement supplied.</p><p>(e) An endorsement of a security certificate in bearer form may give notice of an adverse claim to the certificate, but it does not otherwise affect a right to registration that the holder possesses.</p><p>(f) Unless otherwise agreed, a person making an endorsement assumes only the obligations provided in § <a href='http://law.lis.virginia.gov/vacode/8.8A-108/'>8.8A-108</a> and not an obligation that the security will be honored by the issuer.</p><p>1996, c. <a href='http://lis.virginia.gov/cgi-bin/legp604.exe?961+ful+CHAP0216'>216</a>.</p>
218.8ACOMMERCIAL CODE — INVESTMENT SECURITIES3TRANSFER OF CERTIFICATED AND UNCERTIFICATED SECURITIES§ 8.8A-305Instruction.<p>(a) If an instruction has been originated by an appropriate person but is incomplete in any other respect, any person may complete it as authorized and the issuer may rely on it as completed, even though it has been completed incorrectly.</p><p>(b) Unless otherwise agreed, a person initiating an instruction assumes only the obligations imposed by § <a href='http://law.lis.virginia.gov/vacode/8.8A-108/'>8.8A-108</a> and not an obligation that the security will be honored by the issuer.</p><p>1996, c. <a href='http://lis.virginia.gov/cgi-bin/legp604.exe?961+ful+CHAP0216'>216</a>.</p>
228.8ACOMMERCIAL CODE — INVESTMENT SECURITIES3TRANSFER OF CERTIFICATED AND UNCERTIFICATED SECURITIES§ 8.8A-306Effect of guaranteeing signature, endorsement, or instruction.<p>(a) A person who guarantees a signature of an endorser of a security certificate warrants that at the time of signing:</p><p>(1) the signature was genuine;</p><p>(2) the signer was an appropriate person to endorse, or if the signature is by an agent, the agent had actual authority to act on behalf of the appropriate person; and</p><p>(3) the signer had legal capacity to sign.</p><p>(b) A person who guarantees a signature of the originator of an instruction warrants that at the time of signing:</p><p>(1) the signature was genuine;</p><p>(2) the signer was an appropriate person to originate the instruction, or if the signature is by an agent, the agent had actual authority to act on behalf of the appropriate person, if the person specified in the instruction as the registered owner was, in fact, the registered owner, as to which fact the signature guarantor does not make a warranty; and</p><p>(3) the signer had legal capacity to sign.</p><p>(c) A person who specially guarantees the signature of an originator of an instruction makes the warranties of a signature guarantor under subsection (b) and also warrants that at the time the instruction is presented to the issuer:</p><p>(1) the person specified in the instruction as the registered owner of the uncertificated security will be the registered owner; and</p><p>(2) the transfer of the uncertificated security requested in the instruction will be registered by the issuer free from all liens, security interests, restrictions, and claims other than those specified in the instruction.</p><p>(d) A guarantor under subsections (a) and (b) or a special guarantor under subsection (c) does not otherwise warrant the rightfulness of the transfer.</p><p>(e) A person who guarantees an endorsement of a security certificate makes the warranties of a signature guarantor under subsection (a) and also warrants the rightfulness of the transfer in all respects.</p><p>(f) A person who guarantees an instruction requesting the transfer of an uncertificated security makes the warranties of a special signature guarantor under subsection (c) and also warrants the rightfulness of the transfer in all respects.</p><p>(g) An issuer may not require a special guaranty of signature, a guaranty of endorsement, or a guaranty of instruction as a condition to registration of transfer.</p><p>(h) The warranties under this section are made to a person taking or dealing with the security in reliance on the guaranty, and the guarantor is liable to the person for loss resulting from their breach. An endorser or originator of an instruction whose signature, endorsement, or instruction has been guaranteed is liable to a guarantor for any loss suffered by the guarantor as a result of breach of the warranties of the guarantor.</p><p>1996, c. <a href='http://lis.virginia.gov/cgi-bin/legp604.exe?961+ful+CHAP0216'>216</a>.</p>
238.8ACOMMERCIAL CODE — INVESTMENT SECURITIES3TRANSFER OF CERTIFICATED AND UNCERTIFICATED SECURITIES§ 8.8A-307Purchaser's right to requisites for registration of transfer.<p>Unless otherwise agreed, the transferor of a security on due demand shall supply the purchaser with proof of authority to transfer or with any other requisite necessary to obtain registration of the transfer of the security, but if the transfer is not for value, a transferor need not comply unless the purchaser pays the necessary expenses. If the transferor fails within a reasonable time to comply with the demand, the purchaser may reject or rescind the transfer.</p><p>1996, c. <a href='http://lis.virginia.gov/cgi-bin/legp604.exe?961+ful+CHAP0216'>216</a>.</p>
248.8ACOMMERCIAL CODE — INVESTMENT SECURITIES4REGISTRATION§ 8.8A-401Duty of issuer to register transfer.<p>(a) If a certificated security in registered form is presented to an issuer with a request to register transfer or an instruction is presented to an issuer with a request to register transfer of an uncertificated security, the issuer shall register the transfer as requested if:</p><p>(1) under the terms of the security the person seeking registration of transfer is eligible to have the security registered in its name;</p><p>(2) the endorsement or instruction is made by the appropriate person or by an agent who has actual authority to act on behalf of the appropriate person;</p><p>(3) reasonable assurance is given that the endorsement or instruction is genuine and authorized (§ <a href='http://law.lis.virginia.gov/vacode/8.8A-402/'>8.8A-402</a>);</p><p>(4) any applicable law relating to the collection of taxes has been complied with;</p><p>(5) the transfer does not violate any restriction on transfer imposed by the issuer in accordance with § <a href='http://law.lis.virginia.gov/vacode/8.8A-204/'>8.8A-204</a>;</p><p>(6) a demand that the issuer not register transfer has not become effective under § <a href='http://law.lis.virginia.gov/vacode/8.8A-403/'>8.8A-403</a>, or the issuer has complied with § <a href='http://law.lis.virginia.gov/vacode/8.8A-403/'>8.8A-403</a> (b) but no legal process or indemnity bond is obtained as provided in § <a href='http://law.lis.virginia.gov/vacode/8.8A-403/'>8.8A-403</a> (d); and</p><p>(7) the transfer is in fact rightful or is to a protected purchaser.</p><p>(b) If an issuer is under a duty to register a transfer of a security, the issuer is liable to a person presenting a certificated security or an instruction for registration or to the person's principal for loss resulting from unreasonable delay in registration or failure or refusal to register the transfer.</p><p>1996, c. <a href='http://lis.virginia.gov/cgi-bin/legp604.exe?961+ful+CHAP0216'>216</a>.</p>
258.8ACOMMERCIAL CODE — INVESTMENT SECURITIES4REGISTRATION§ 8.8A-403Demand that issuer not register transfer.<p>(a) A person who is an appropriate person to make an endorsement or originate an instruction may demand that the issuer not register transfer of a security by communicating to the issuer a notification that identifies the registered owner and the issue of which the security is a part and provides an address for communications directed to the person making the demand. The demand is effective only if it is received by the issuer at a time and in a manner affording the issuer reasonable opportunity to act on it.</p><p>(b) If a certificated security in registered form is presented to an issuer with a request to register transfer or an instruction is presented to an issuer with a request to register transfer of an uncertificated security after a demand that the issuer not register transfer has become effective, the issuer shall promptly communicate to (i) the person who initiated the demand at the address provided in the demand and (ii) the person who presented the security for registration of transfer or initiated the instruction requesting registration of transfer a notification stating that:</p><p>(1) the certificated security has been presented for registration of transfer or instruction for registration of transfer of the uncertificated security has been received;</p><p>(2) a demand that the issuer not register transfer had previously been received; and</p><p>(3) the issuer will withhold registration of transfer for a period of time stated in the notification in order to provide the person who initiated the demand an opportunity to obtain legal process or an indemnity bond.</p><p>(c) The period described in subsection (b) (3) may not exceed thirty days after the date of communication of the notification. A shorter period may be specified by the issuer if it is not manifestly unreasonable.</p><p>(d) An issuer is not liable to a person who initiated a demand that the issuer not register transfer for any loss the person suffers as a result of registration of a transfer pursuant to an effective endorsement or instruction if the person who initiated the demand does not, within the time stated in the issuer's communication, either:</p><p>(1) obtain an appropriate restraining order, injunction, or other process from a court of competent jurisdiction enjoining the issuer from registering the transfer; or</p><p>(2) file with the issuer an indemnity bond, sufficient in the issuer's judgment to protect the issuer and any transfer agent, registrar, or other agent of the issuer involved from any loss it or they may suffer by refusing to register the transfer.</p><p>(e) This section does not relieve an issuer from liability for registering transfer pursuant to an endorsement or instruction that was not effective.</p><p>1996, c. <a href='http://lis.virginia.gov/cgi-bin/legp604.exe?961+ful+CHAP0216'>216</a>.</p>
268.8ACOMMERCIAL CODE — INVESTMENT SECURITIES4REGISTRATION§ 8.8A-404Wrongful registration.<p>(a) Except as otherwise provided in § <a href='http://law.lis.virginia.gov/vacode/8.8A-406/'>8.8A-406</a>, an issuer is liable for wrongful registration of transfer if the issuer has registered a transfer of a security to a person not entitled to it, and the transfer was registered:</p><p>(1) pursuant to an ineffective endorsement or instruction;</p><p>(2) after a demand that the issuer not register transfer became effective under § <a href='http://law.lis.virginia.gov/vacode/8.8A-403/'>8.8A-403</a> (a) and the issuer did not comply with § <a href='http://law.lis.virginia.gov/vacode/8.8A-403/'>8.8A-403</a> (b);</p><p>(3) after the issuer had been served with an injunction, restraining order, or other legal process enjoining it from registering the transfer, issued by a court of competent jurisdiction, and the issuer had a reasonable opportunity to act on the injunction, restraining order, or other legal process; or</p><p>(4) by an issuer acting in collusion with the wrongdoer.</p><p>(b) An issuer that is liable for wrongful registration of transfer under subsection (a) on demand shall provide the person entitled to the security with a like certificated or uncertificated security, and any payments or distributions that the person did not receive as a result of the wrongful registration. If an overissue would result, the issuer's liability to provide the person with a like security is governed by § <a href='http://law.lis.virginia.gov/vacode/8.8A-210/'>8.8A-210</a>.</p><p>(c) Except as otherwise provided in subsection (a) or in a law relating to the collection of taxes, an issuer is not liable to an owner or other person suffering loss as a result of the registration of a transfer of a security if registration was made pursuant to an effective endorsement or instruction.</p><p>1996, c. <a href='http://lis.virginia.gov/cgi-bin/legp604.exe?961+ful+CHAP0216'>216</a>.</p>
278.8ACOMMERCIAL CODE — INVESTMENT SECURITIES4REGISTRATION§ 8.8A-405Replacement of lost, destroyed or wrongfully taken security certificate.<p>(a) If an owner of a certificated security, whether in registered or bearer form, claims that the certificate has been lost, destroyed, or wrongfully taken, the issuer shall issue a new certificate if the owner:</p><p>(1) so requests before the issuer has notice that the certificate has been acquired by a protected purchaser;</p><p>(2) files with the issuer a sufficient indemnity bond; and</p><p>(3) satisfies other reasonable requirements imposed by the issuer.</p><p>(b) If, after the issue of a new security certificate, a protected purchaser of the original certificate presents it for registration of transfer, the issuer shall register the transfer unless an overissue would result. In that case, the issuer's liability is governed by § <a href='http://law.lis.virginia.gov/vacode/8.8A-210/'>8.8A-210</a>. In addition to any rights on the indemnity bond, an issuer may recover the new certificate from a person to whom it was issued or any person taking under that person, except a protected purchaser.</p><p>1996, c. <a href='http://lis.virginia.gov/cgi-bin/legp604.exe?961+ful+CHAP0216'>216</a>.</p>
288.8ACOMMERCIAL CODE — INVESTMENT SECURITIES4REGISTRATION§ 8.8A-406Obligation to notify issuer of lost, destroyed or wrongfully taken security certificate.<p>If a security certificate has been lost, apparently destroyed, or wrongfully taken, and the owner fails to notify the issuer of that fact within a reasonable time after the owner has notice of it and the issuer registers a transfer of the security before receiving notification, the owner may not assert against the issuer a claim for registering the transfer under § <a href='http://law.lis.virginia.gov/vacode/8.8A-404/'>8.8A-404</a> or a claim to a new security certificate under § <a href='http://law.lis.virginia.gov/vacode/8.8A-405/'>8.8A-405</a>.</p><p>1996, c. <a href='http://lis.virginia.gov/cgi-bin/legp604.exe?961+ful+CHAP0216'>216</a>.</p>
298.8ACOMMERCIAL CODE — INVESTMENT SECURITIES4REGISTRATION§ 8.8A-407Authenticating trustee, transfer agent, and registrar.<p>A person acting as authenticating trustee, transfer agent, registrar, or other agent for an issuer in the registration of a transfer of its securities, in the issue of new security certificates or uncertificated securities, or in the cancellation of surrendered security certificates has the same obligation to the holder or owner of a certificated or uncertificated security with regard to the particular functions performed as the issuer has in regard to those functions.</p><p>1996, c. <a href='http://lis.virginia.gov/cgi-bin/legp604.exe?961+ful+CHAP0216'>216</a>.</p>
308.8ACOMMERCIAL CODE — INVESTMENT SECURITIES5SECURITY ENTITLEMENTS§ 8.8A-502Assertion of adverse claim against entitlement holder.<p>An action based on an adverse claim to a financial asset, whether framed in conversion, replevin, constructive trust, equitable lien, or other theory, may not be asserted against a person who acquires a security entitlement under § <a href='http://law.lis.virginia.gov/vacode/8.8A-501/'>8.8A-501</a> for value and without notice of the adverse claim.</p><p>1996, c. <a href='http://lis.virginia.gov/cgi-bin/legp604.exe?961+ful+CHAP0216'>216</a>.</p>
318.8ACOMMERCIAL CODE — INVESTMENT SECURITIES5SECURITY ENTITLEMENTS§ 8.8A-503Property interest of entitlement holder in financial asset held by securities intermediary.<p>(a) To the extent necessary for a securities intermediary to satisfy all security entitlements with respect to a particular financial asset, all interests in that financial asset held by the securities intermediary are held by the securities intermediary for the entitlement holders, are not property of the securities intermediary, and are not subject to claims of creditors of the securities intermediary, except as otherwise provided in § <a href='http://law.lis.virginia.gov/vacode/8.8A-511/'>8.8A-511</a>.</p><p>(b) An entitlement holder's property interest with respect to a particular financial asset under subsection (a) is a pro rata property interest in all interests in that financial asset held by the securities intermediary, without regard to the time the entitlement holder acquired the security entitlement or the time the securities intermediary acquired the interest in that financial asset.</p><p>(c) An entitlement holder's property interest with respect to a particular financial asset under subsection (a) may be enforced against the securities intermediary only by exercise of the entitlement holder's rights under §§ <a href='http://law.lis.virginia.gov/vacode/8.8A-505/'>8.8A-505</a> through <a href='http://law.lis.virginia.gov/vacode/8.8A-508/'>8.8A-508</a>.</p><p>(d) An entitlement holder's property interest with respect to a particular financial asset under subsection (a) may be enforced against a purchaser of the financial asset or interest therein only if:</p><p>(1) insolvency proceedings have been initiated by or against the securities intermediary;</p><p>(2) the securities intermediary does not have sufficient interests in the financial asset to satisfy the security entitlements of all of its entitlement holders to that financial asset;</p><p>(3) the securities intermediary violated its obligations under § <a href='http://law.lis.virginia.gov/vacode/8.8A-504/'>8.8A-504</a> by transferring the financial asset or interest therein to the purchaser; and</p><p>(4) the purchaser is not protected under subsection (e). The trustee or other liquidator, acting on behalf of all entitlement holders having security entitlements with respect to a particular financial asset, may recover the financial asset, or interest therein, from the purchaser. If the trustee or other liquidator elects not to pursue that right, an entitlement holder whose security entitlement remains unsatisfied has the right to recover its interest in the financial asset from the purchaser.</p><p>(e) An action based on the entitlement holder's property interest with respect to a particular financial asset under subsection (a), whether framed in conversion, replevin, constructive trust, equitable lien, or other theory, may not be asserted against any purchaser of a financial asset or interest therein who gives value, obtains control, and does not act in collusion with the securities intermediary in violating the securities intermediary's obligations under § <a href='http://law.lis.virginia.gov/vacode/8.8A-504/'>8.8A-504</a>.</p><p>1996, c. <a href='http://lis.virginia.gov/cgi-bin/legp604.exe?961+ful+CHAP0216'>216</a>.</p>
328.8ACOMMERCIAL CODE — INVESTMENT SECURITIES5SECURITY ENTITLEMENTS§ 8.8A-504Duty of securities intermediary to maintain financial asset.<p>(a) A securities intermediary shall promptly obtain and thereafter maintain a financial asset in a quantity corresponding to the aggregate of all security entitlements it has established in favor of its entitlement holders with respect to that financial asset. The securities intermediary may maintain those financial assets directly or through one or more other securities intermediaries.</p><p>(b) Except to the extent otherwise agreed by its entitlement holder, a securities intermediary may not grant any security interests in a financial asset it is obligated to maintain pursuant to subsection (a).</p><p>(c) A securities intermediary satisfies the duty in subsection (a) if:</p><p>(1) the securities intermediary acts with respect to the duty as agreed upon by the entitlement holder and the securities intermediary; or</p><p>(2) in the absence of agreement, the securities intermediary exercises due care in accordance with reasonable commercial standards to obtain and maintain the financial asset.</p><p>(d) This section does not apply to a clearing corporation that is itself the obligor of an option or similar obligation to which its entitlement holders have security entitlements.</p><p>1996, c. <a href='http://lis.virginia.gov/cgi-bin/legp604.exe?961+ful+CHAP0216'>216</a>.</p>
338.8ACOMMERCIAL CODE — INVESTMENT SECURITIES5SECURITY ENTITLEMENTS§ 8.8A-505Duty of securities intermediary with respect to payments and distributions.<p>(a) A securities intermediary shall take action to obtain a payment or distribution made by the issuer of a financial asset. A securities intermediary satisfies the duty if:</p><p>(1) the securities intermediary acts with respect to the duty as agreed upon by the entitlement holder and the securities intermediary; or</p><p>(2) in the absence of agreement, the securities intermediary exercises due care in accordance with reasonable commercial standards to attempt to obtain the payment or distribution.</p><p>(b) A securities intermediary is obligated to its entitlement holder for a payment or distribution made by the issuer of a financial asset if the payment or distribution is received by the securities intermediary.</p><p>1996, c. <a href='http://lis.virginia.gov/cgi-bin/legp604.exe?961+ful+CHAP0216'>216</a>.</p>
348.8ACOMMERCIAL CODE — INVESTMENT SECURITIES5SECURITY ENTITLEMENTS§ 8.8A-506Duty of securities intermediary to exercise rights as directed by entitlement holder.<p>A securities intermediary shall exercise rights with respect to a financial asset if directed to do so by an entitlement holder. A securities intermediary satisfies the duty if:</p><p>(1) the securities intermediary acts with respect to the duty as agreed upon by the entitlement holder and the securities intermediary; or</p><p>(2) in the absence of agreement, the securities intermediary either places the entitlement holder in a position to exercise the rights directly or exercises due care in accordance with reasonable commercial standards to follow the direction of the entitlement holder.</p><p>1996, c. <a href='http://lis.virginia.gov/cgi-bin/legp604.exe?961+ful+CHAP0216'>216</a>.</p>
358.8ACOMMERCIAL CODE — INVESTMENT SECURITIES5SECURITY ENTITLEMENTS§ 8.8A-507Duty of securities intermediary to comply with entitlement order.<p>(a) A securities intermediary shall comply with an entitlement order if the entitlement order is originated by the appropriate person, the securities intermediary has had reasonable opportunity to assure itself that the entitlement order is genuine and authorized, and the securities intermediary has had reasonable opportunity to comply with the entitlement order. A securities intermediary satisfies the duty if:</p><p>(1) the securities intermediary acts with respect to the duty as agreed upon by the entitlement holder and the securities intermediary; or</p><p>(2) in the absence of agreement, the securities intermediary exercises due care in accordance with reasonable commercial standards to comply with the entitlement order.</p><p>(b) If a securities intermediary transfers a financial asset pursuant to an ineffective entitlement order, the securities intermediary shall reestablish a security entitlement in favor of the person entitled to it, and pay or credit any payments or distributions that the person did not receive as a result of the wrongful transfer. If the securities intermediary does not reestablish a security entitlement, the securities intermediary is liable to the entitlement holder for damages.</p><p>1996, c. <a href='http://lis.virginia.gov/cgi-bin/legp604.exe?961+ful+CHAP0216'>216</a>.</p>
368.8ACOMMERCIAL CODE — INVESTMENT SECURITIES5SECURITY ENTITLEMENTS§ 8.8A-508Duty of securities intermediary to change entitlement holder's position to other form of security holding.<p>A securities intermediary shall act at the direction of an entitlement holder to change a security entitlement into another available form of holding for which the entitlement holder is eligible, or to cause the financial asset to be transferred to a securities account of the entitlement holder with another securities intermediary. A securities intermediary satisfies the duty if:</p><p>(1) the securities intermediary acts as agreed upon by the entitlement holder and the securities intermediary; or</p><p>(2) in the absence of agreement, the securities intermediary exercises due care in accordance with reasonable commercial standards to follow the direction of the entitlement holder.</p><p>1996, c. <a href='http://lis.virginia.gov/cgi-bin/legp604.exe?961+ful+CHAP0216'>216</a>.</p>
378.8ACOMMERCIAL CODE — INVESTMENT SECURITIES5SECURITY ENTITLEMENTS§ 8.8A-509Specification of duties of securities intermediary by other statute or regulation; manner of performance of duties of securities intermediary and exercise of rights of entitlement holder.<p>(a) If the substance of a duty imposed upon a securities intermediary by §§ <a href='http://law.lis.virginia.gov/vacode/8.8A-504/'>8.8A-504</a> through <a href='http://law.lis.virginia.gov/vacode/8.8A-508/'>8.8A-508</a> is the subject of other statute, regulation, or rule, compliance with that statute, regulation, or rule satisfies the duty.</p><p>(b) To the extent that specific standards for the performance of the duties of a securities intermediary or the exercise of the rights of an entitlement holder are not specified by other statute, regulation, or rule or by agreement between the securities intermediary and entitlement holder, the securities intermediary shall perform its duties and the entitlement holder shall exercise its rights in a commercially reasonable manner.</p><p>(c) The obligation of a securities intermediary to perform the duties imposed by §§ <a href='http://law.lis.virginia.gov/vacode/8.8A-504/'>8.8A-504</a> through <a href='http://law.lis.virginia.gov/vacode/8.8A-508/'>8.8A-508</a> is subject to:</p><p>(1) rights of the securities intermediary arising out of a security interest under a security agreement with the entitlement holder or otherwise; and</p><p>(2) rights of the securities intermediary under other law, regulation, rule, or agreement to withhold performance of its duties as a result of unfulfilled obligations of the entitlement holder to the securities intermediary.</p><p>(d) Sections <a href='http://law.lis.virginia.gov/vacode/8.8A-504/'>8.8A-504</a> through <a href='http://law.lis.virginia.gov/vacode/8.8A-508/'>8.8A-508</a> do not require a securities intermediary to take any action that is prohibited by other statute, regulation, or rule.</p><p>1996, c. <a href='http://lis.virginia.gov/cgi-bin/legp604.exe?961+ful+CHAP0216'>216</a>.</p>
388.8ACOMMERCIAL CODE — INVESTMENT SECURITIES5SECURITY ENTITLEMENTS§ 8.8A-510Rights of purchaser of security entitlement from entitlement holder.<p>(a) In a case not covered by the priority rules in Title 8.9A or the rules stated in subsection (c), an action based on an adverse claim to a financial asset or security entitlement, whether framed in conversion, replevin, constructive trust, equitable lien, or other theory, may not be asserted against a person who purchases a security entitlement, or an interest therein, from an entitlement holder if the purchaser gives value, does not have notice of the adverse claim, and obtains control.</p><p>(b) If an adverse claim could not have been asserted against an entitlement holder under § <a href='http://law.lis.virginia.gov/vacode/8.8A-502/'>8.8A-502</a>, the adverse claim cannot be asserted against a person who purchases a security entitlement, or an interest therein, from the entitlement holder.</p><p>(c) In a case not covered by the priority rules in Title 8.9A, a purchaser for value of a security entitlement, or an interest therein, who obtains control has priority over a purchaser of a security entitlement, or an interest therein, who does not obtain control. Except as otherwise provided in subsection (d), purchasers who have control rank according to priority in time of:</p><p>(1) the purchaser's becoming the person for whom the securities account, in which the security entitlement is carried, is maintained, if the purchaser obtained control under subdivision (d) (1) of § <a href='http://law.lis.virginia.gov/vacode/8.8A-106/'>8.8A-106</a>;</p><p>(2) the securities intermediary's agreement to comply with the purchaser's entitlement orders with respect to security entitlements carried or to be carried in the securities account in which the security entitlement is carried, if the purchaser obtained control under subdivision (d) (2) of § <a href='http://law.lis.virginia.gov/vacode/8.8A-106/'>8.8A-106</a>; or</p><p>(3) if the purchaser obtained control through another person under subdivision (d) (3) of § <a href='http://law.lis.virginia.gov/vacode/8.8A-106/'>8.8A-106</a>, the time on which priority would be based under this subsection if the other person were the secured party.</p><p>(d) A securities intermediary as purchaser has priority over a conflicting purchaser who has control unless otherwise agreed by the securities intermediary.</p><p>1996, c. <a href='http://lis.virginia.gov/cgi-bin/legp604.exe?961+ful+CHAP0216'>216</a>; 2000, c. <a href='http://lis.virginia.gov/cgi-bin/legp604.exe?001+ful+CHAP1007'>1007</a>.</p>
398.8ACOMMERCIAL CODE — INVESTMENT SECURITIES5SECURITY ENTITLEMENTS§ 8.8A-511Priority among security interests and entitlement holders.<p>(a) Except as otherwise provided in subsections (b) and (c), if a securities intermediary does not have sufficient interests in a particular financial asset to satisfy both its obligations to entitlement holders who have security entitlements to that financial asset and its obligation to a creditor of the securities intermediary who has a security interest in that financial asset, the claims of entitlement holders, other than the creditor, have priority over the claim of the creditor.</p><p>(b) A claim of a creditor of a securities intermediary who has a security interest in a financial asset held by a securities intermediary has priority over claims of the securities intermediary's entitlement holders who have security entitlements with respect to that financial asset if the creditor has control over the financial asset.</p><p>(c) If a clearing corporation does not have sufficient financial assets to satisfy both its obligations to entitlement holders who have security entitlements with respect to a financial asset and its obligation to a creditor of the clearing corporation who has a security interest in that financial asset, the claim of the creditor has priority over the claims of entitlement holders.</p><p>1996, c. <a href='http://lis.virginia.gov/cgi-bin/legp604.exe?961+ful+CHAP0216'>216</a>.</p>
408.8ACOMMERCIAL CODE — INVESTMENT SECURITIES6TRANSITION PROVISIONS§ 8.8A-601Savings clause.<p>(a) This title does not affect an action or proceeding commenced before January 1, 1997.</p><p>(b) If a security interest in a security is perfected on January 1, 1997, and the action by which the security interest was perfected would suffice to perfect a security interest under this title, no further action is required to continue perfection.</p><p>If a security interest in a security is perfected on January 1, 1997, but the action by which the security interest was perfected would not suffice to perfect a security interest under this title, the security interest remains perfected for a period of four months, until May 1, 1997, and continues perfected thereafter if appropriate action to perfect under this title is taken within that period.</p><p>If a security interest is perfected on January 1, 1997, and the security interest can be perfected by filing under this title, a financing statement signed by the secured party instead of the debtor may be filed within that period to continue perfection or thereafter to perfect.</p><p>1996, c. <a href='http://lis.virginia.gov/cgi-bin/legp604.exe?961+ful+CHAP0216'>216</a>.</p>