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84-8-102. 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" under the federal securities laws;

(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 subsection (b)(2) or (3) of K.S.A. 84-8-501, and amendments thereto, 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 security entitlement.

(9) "Financial asset," except as otherwise provided in K.S.A. 84-8-103, and amendments thereto, means:

(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) Reserved.

(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 redeemed.

(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 business maintains securities accounts for others and is acting in that capacity.

(15) "Security," except as otherwise provided in K.S.A. 84-8-103, and amendments thereto, 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

(iii) which:

(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 security.

(17) "Security entitlement" means the rights and property interest of an entitlement holder with respect to a financial asset specified in K.S.A. 84-8-501 through 84-8-511, and amendments thereto.

(18) "Uncertificated security" means a security that is not represented by a certificate.

(b) Other definitions applying to this article and the sections in which they appear are:

Appropriate person

84-8-107, and amendments thereto


84-8-106, and amendments thereto


84-8-301, and amendments thereto

Investment company security

84-8-103, and amendments thereto


84-8-201, and amendments thereto


84-8-210, and amendments thereto

Protected purchaser

84-8-303, and amendments thereto

Securities account

84-8-501, and amendments thereto

(c) In addition, article 1 of chapter 84 of the Kansas Statutes Annotated, and amendments thereto, 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.

History: L. 1996, ch. 202, § 29; L. 2007, ch. 89, § 47; July 1, 2008.


This section contains definitions which apply to Article 8. It is largely derived from the provisions of the former 84-8-102. In addition, 84-1-201 contains definitions which apply throughout the entire Code, including Article 8.

Paragraph (a)(1), defining "adverse claim", is derived from the former 84-8-302 and requires that a person must have an ownership interest in a financial asset and that it is being violated by the transaction. The prior provision was drafted more broadly and did not require both elements. Paragraph (2), derived from and substantially identical to the former 84-8-102(1)(e), is notable because it requires the instrument to be initially issued to "bearer." "Good faith" in paragraph (10) includes the requirement of "the observance of reasonable commercial standards of fair dealing," a requirement also for Articles 3, 4 and 4a, a more comprehensive requirement than the general definition in 84-1-201.

Paragraph (7) defines "entitlement holder" as one entitled to, or having a claim against a securities intermediary. Most of those rights will be described in Part 5 of Article 8. The entitlement holder is to be distinguished from the owner of the security. Paragraph (9) defines a "financial asset" as a security or as an interest in an entity or property in which it is common to trade or invest. This paragraph should be read in conjunction with paragraph (15) and 84-8-103 and 84-8-501. Paragraph (15) defines a "security" as an obligation of an issuer which meets all three of the following requirements: (a) it is represented by a certificate or a registration; (b) it is one of a class or series or is divisible into a class or series; and (c) it is traded on securities exchanges or is made subject to Article 8.

The definition of "security" in the Kansas Blue Sky Law, K.S.A. 17-1252(j), while including most of the common types of "securities" dealt with in Article 8, is not co-extensive with the definition of this section, and the use of the term "security" in both statutes is not interchangeable. Subsection (d) reiterates the danger of trying to use a definition from one law in a different context.

Subsection (b) is a cross-reference to other definitions found in Article 8, and subsection (c) incorporates definitions and general principles from Article 1.

Revisor's Note:

Former section 84-8-102 was repealed by L. 1996, ch. 202, § 91 and the number reassigned to the current text.


1. Membership units in limited liability company which were not traded on any market were in nature of "general intangibles" for attachment and perfection under the facts of the case. In re Brown, 479 B.R. 112 (Bkrtcy. D. Kan. 2012).

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