Chapter 408, UNIFORM COMMERCIAL CODE — INVESTMENT SECURITIES

408.101 Short title. This chapter may be cited as uniform commercial code — investment securities. History: 1997 a. 297.

408.102 Definitions. (1) In this chapter: (a) “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. (b) “Bearer for…

408.103 Rules for determining whether certain obligations and interests are securities or financial assets. (1) A share or similar equity interest issued by a corporation, business trust, joint stock company or similar entity is a security. (2) An “investment company security” is…

408.104 Acquisition of security or financial asset or interest therein. (1) A person acquires a security or an interest therein, under this chapter, if: (a) The person is a purchaser to whom a security is delivered pursuant to s. 408.301; or (b) The person acquires a security ent…

408.105 Notice of adverse claim. (1) A person has notice of an adverse claim if: (a) The person knows of the adverse claim; (b) The person is aware of facts sufficient to indicate that there is a significant probability that the adverse claim exists and deliberately avoids inform…

408.106 Control. (1) A purchaser has “control” of a certificated security in bearer form if the certificated security is delivered to the purchaser. (2) A purchaser has “control” of a certificated security in registered form if the certificated security is delivered to the purcha…

408.107 Whether endorsement, instruction or entitlement order is effective. (1) In this chapter, “appropriate person” means: (a) With respect to an endorsement, the person specified by a security certificate or by an effective special endorsement to be entitled to the security; (…

408.108 Warranties in direct holding. (1) 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: (a) The certificate is genuine and has not …

408.109 Warranties in indirect holding. (1) A person who originates an entitlement order to a securities intermediary warrants to the securities intermediary that: (a) The entitlement order is made by an appropriate person, or if the entitlement order is by an agent, the agent ha…

408.110 Applicability; choice of law. (1) The local law of the issuer’s jurisdiction, as specified in sub. (4), governs: (a) The validity of a security; (b) The rights and duties of the issuer with respect to registration of transfer; (c) The effectiveness of registration of tran…

408.111 Clearing corporation rules. 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 chs. 401 to 411 and affects another party who…

408.112 Creditor’s legal process. (1) 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 sub. (4). However, a certificate…

408.113 Statute of frauds inapplicable. 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 modificat…

408.114 Evidentiary rules concerning certificated securities. The following rules apply in an action on a certificated security against the issuer: (1) Unless specifically denied in the pleadings, each signature on a security certificate or in a necessary endorsement is admitted.…

408.115 Securities intermediary and others not liable to adverse claimant. 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 i…

408.116 Securities intermediary as purchaser for value. 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 intermed…

408.201 Issuer. (1) With respect to an obligation on or a defense to a security, an “issuer” includes a person that: (a) Places or authorizes the placing of its name on a security certificate, other than as authenticating trustee, registrar, transfer agent or the like, to evidenc…

408.202 Issuer’s responsibility and defenses; notice of defect or defense. (1) Even against a purchaser for value and without notice, the terms of a certificated security include terms stated on the certificate and terms made part of the security by reference on the certificate t…

408.203 Staleness as notice of defect or defense. 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…

408.204 Effect of issuer’s restriction on transfer. A restriction on the transfer of a security imposed by the issuer, even if otherwise lawful, is ineffective against a person without knowledge of the restriction unless: (1) The security is certificated and the restriction is no…

408.205 Effect of unauthorized signature on security certificate. 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 purch…

408.206 Completion or alteration of security certificate. (1) If a security certificate contains the signatures necessary to its issue or transfer but is incomplete in any other respect: (a) Any person may complete it by filling in the blanks as authorized; and (b) Even if the bl…

408.207 Rights and duties of issuer with respect to registered owners. (1) 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 inden…

408.208 Effect of signature of authenticating trustee, registrar or transfer agent. (1) 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 wi…

408.209 Issuer’s lien. 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. History: 1997 a. 297.

408.210 Overissue. (1) In this chapter, “overissue” means the issue of securities in excess of the amount that the issuer has corporate power to issue, but an overissue does not occur if appropriate action has cured the overissue. (2) Except as otherwise provided in subs. (3) and…

408.301 Delivery. (1) Delivery of a certificated security to a purchaser occurs when: (a) The purchaser acquires possession of the security certificate; (b) Another person, other than a securities intermediary, either acquires possession of the security certificate on behalf of t…

408.302 Rights of purchaser. (1) Except as otherwise provided in subs. (2) and (3), a purchaser of a certificated or uncertificated security acquires all rights in the security that the transferor had or had power to transfer. (2) A purchaser of a limited interest acquires rights…

408.303 Protected purchaser. Cross-reference: See definitions in s. 401.201. SUBCHAPTER I GENERAL MATTERS

408.304 Endorsement. (1) 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 sp…

408.305 Instruction. (1) 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. (2) Unless otherwise…

408.306 Effect of guaranteeing signature, endorsement or instruction. (1) A person who guarantees a signature of an endorser of a security certificate warrants that at the time of signing: (a) The signature was genuine; (b) The signer was an appropriate person to endorse, or, if …

408.307 Purchaser’s right to requisites for registration of transfer. 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…

408.401 Duty of issuer to register transfer. (1) 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 s…

408.402 Assurance that endorsement or instruction is effective. (1) In this section: (a) “Guaranty of the signature” means a guaranty signed by or on behalf of a person reasonably believed by the issuer to be responsible. An issuer may adopt standards with respect to responsibili…

408.403 Demand that issuer not register transfer. (1) 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 register…

408.404 Wrongful registration. (1) Except as otherwise provided in s. 408.406, 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: (a) Pursuant to an ineff…

408.405 Replacement of lost, destroyed or wrongfully taken security certificate. (1) 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…

408.406 Obligation to notify issuer of lost, destroyed or wrongfully taken security certificate. 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 n…

408.407 Authenticating trustee, transfer agent and registrar. 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 securit…

408.501 Securities account; acquisition of security entitlement from securities intermediary. (1) In this chapter, “securities account” means an account to which a financial asset is or may be credited in accordance with an agreement under which the person maintaining the account…

408.502 Assertion of adverse claim against entitlement holder. 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 entitl…

408.503 Property interest of entitlement holder in financial asset held by securities intermediary. (1) 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 h…

408.504 Duty of securities intermediary to maintain financial asset. (1) 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 entitlem…

408.505 Duty of securities intermediary with respect to payments and distributions. (1) 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: (a) The securities int…

408.506 Duty of securities intermediary to exercise rights as directed by entitlement holder. 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: (1) The …

408.507 Duty of securities intermediary to comply with entitlement order. (1) 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 it…

408.508 Duty of securities intermediary to change entitlement holder’s position to other form of security holding. A securities intermediary shall act at the direction of UCC — INVESTMENT SECURITIES 408.510 an entitlement holder to change a security entitlement into another avail…

408.509 Specification 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. (1) If the substance of a duty imposed upon a securities intermediary by ss. 408.50…

408.510 Rights of purchaser of security entitlement from entitlement holder. (1) In a case not covered by the priority rules in ch. 409 or the rules stated in sub. (3), an action based on an adverse claim to a financial asset or security entitlement, whether framed in conversion,…