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84-8-109. Warranties in indirect holding. (a) A person who originates an entitlement order to a securities intermediary warrants to the securities intermediary that:

(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

(2) there is no adverse claim to the security entitlement.

(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 subsection (a) or (b) of K.S.A. 84-8-108.

(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 subsection (a) or (b) of K.S.A. 84-8-108.

History: L. 1996, ch. 202, § 36; July 1.


This section deals with the warranties given to securities intermediaries in the indirect holding system. Subsection (a) deals with the limited warranties given by the originator of the entitlement order, warranting only that the person is the appropriate person and that there are not adverse claims, both being defined terms. Subsection (b) deals with a person who brings a certificated security into the indirect holding system, and provides that such person makes the full warranties provided for in 84-8-108(a) if it is a certificated security, and in 84-8-108(b) if it is an uncertificated security. Subsection (c) deals with the inverse situation where a securities intermediary "delivers" ( defined term, see 84-8-301) a certificated or uncertificated security to the entitlement holder.

Warranties made by trustees and transfer agents are defined in 84-8-208.

Revisor's Note:

Former section 84-8-109 was repealed by L. 1996, ch. 202, § 91 and the number reassigned to the current text.

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