§ 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 record; 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 subdivision 8—501(b)(2) or (3)
of this title, 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 section 8-103 of this title, 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 the 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 its business
maintains securities accounts for others and is acting in that capacity.
(15) “Security,” except as otherwise provided in section 8—103 of this title, 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 part 5 of this article.
(18) “Uncertificated security” means a security that is not represented by a certificate.
(b) The following definitions in this article and other articles apply to this article:
| Appropriate person |
section 8—107 |
| Control |
section 8—106 |
| Controllable account |
section 9—102 |
| Controllable electronic record |
section 12—102 |
| Controllable payment intangible |
section 9—102 |
| 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 of this title 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. (Added 1995, No. 92 (Adj. Sess.), § 1, eff. Jan. 1, 1997; amended 2007, No. 99 (Adj. Sess.), § 17; 2015; 2025, No. 17, § 8, eff. July 1, 2025.)