Colorado Code
Part 3 - Transfer of Certificated and Uncertificated Securities
§ 4-8-303. Protected Purchaser

Source: L. 96: Entire article R&RE, p. 221, § 2, effective July 1.
Editor's note: This section is similar to former §§ 4-8-302 and 4-8-311 as they existed prior to 1996.




The requirement that a protected purchaser obtain control expresses the point that to qualify for the adverse claim cut-off rule a purchaser must take through a transaction that is implemented by the appropriate mechanism. By contrast, the rules in Part 2 provide that any purchaser for value of a security without notice of a defense may take free of the issuer's defense based on that defense. See Section 8-202.
For uncertificated securities, a purchaser can obtain control either by delivery, see Sections 8-106(c)(1) and 8-301(b), or by obtaining an agreement pursuant to which the issuer agrees to act on instructions from the purchaser without further consent from the registered owner, see Section 8-106(c)(2). The control agreement device of Section 8-106(c)(2) takes the place of the "registered pledge" concept of the 1978 version of Article 8. A secured lender who obtains a control agreement under Section 8-106(c)(2) can qualify as a protected purchaser of an uncertificated security.
Definitional Cross References:
"Adverse claim". Section 8-102(a)(1)
"Certificated security". Section 8-102(a)(4)
"Control". Section 8-106
"Notice of adverse claim". Section 8-105
"Purchaser". Sections 1-201(33) & 8-116
"Uncertificated security". Section 8-102(a)(18)
"Value". Sections 1-201(44) & 8-116

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