84-8-301. Delivery. (a) Delivery of a certificated security to a purchaser occurs when:
(1) The purchaser acquires possession of the security certificate;
(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
(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 (A) registered in the name of the purchaser, (B) payable to the order of the purchaser, or (C) specially endorsed to the purchaser by an effective endorsement and has not been endorsed to the securities intermediary or bank.
(b) Delivery of an uncertificated security to a purchaser occurs when:
(1) The issuer registers the purchaser as the registered owner, upon original issue or registration of transfer; or
(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.
History: L. 1996, ch. 202, § 54; L. 2000, ch. 142, § 151; July 1, 2001.
KANSAS COMMENT, 1996
This section is derived from the former 84-8-313 and has been redrafted. It is identical to the 1995 Official Text.
This section deals with "delivery" of both certificated and uncertificated securities. Security entitlements are dealt with in Part 5.
Subsection (a) deals with certificated securities, while subsection (b) deals with uncertificated securities. The section supplements 84-1-201(14), the definition of "delivery," and expands upon prior law. Former K.S.A. 17-4820 and K.S.A. 52-102 dealt with delivery in terms similar to those found in paragraph (a)(1) of this section. The additional paragraphs in subsection (a) recognize the expanded conditions under which many current stock transactions are conducted through brokers and organized exchanges. Paragraphs (a)(2) and (a)(3) deal with agency situations where the agent takes delivery of the certificate for the purchaser. See, however, In re Paragon Securities Co., 599 F.2d 551 (3d Cir. 1979), under which no delivery under any of these paragraphs was found.
Subsection (b), dealing with uncertificated securities, recognizes the distinction between "holder" and "registered owner" of a security entitlement. To be a "holder," a person must have possession of the security. See 84-1-201(20). Even when the purchaser is not the holder, the purchaser is still the registered owner under this subsection upon registration. This status gives the owner protection in the case of the broker's bankruptcy or other insolvency.
Revisor's Note:
Former section 84-8-301 was repealed by L. 1996, ch. 202, § 91 and the number reassigned to the current text.
|
|