(a) The local law of the issuer's jurisdiction, as specified in
subsection (d), governs:
(1) the validity of a security;
(2) the rights and duties of the issuer with respect to
registration of transfer;
(3) the effectiveness of registration of transfer by the issuer;
(4) whether the issuer owes any duties to an adverse claimant to
a security; and
(5) whether an adverse claim can be asserted against a person to
whom transfer of a certificated or uncertificated security is
registered or a person who obtains control of an
uncertificated security.
(b) The local law of the securities intermediary's jurisdiction, as
specified in subsection (e), governs:
(1) acquisition of a security entitlement from the securities
intermediary;
(2) the rights and duties of the securities intermediary and
entitlement holder arising out of a security entitlement;
(3) whether the securities intermediary owes any duties to an
adverse claimant to a security entitlement; and
(4) whether an adverse claim can be asserted against a person who
acquires a security entitlement from the securities
intermediary or a person who purchases a security entitlement
or interest therein from an entitlement holder.
(c) Except with respect to cooperative interests, the local law of
the jurisdiction in which a security certificate is located at the time
of delivery governs whether an adverse claim can be asserted against a
person to whom the security certificate is delivered.
(d) "Issuer's jurisdiction" means the jurisdiction under which the
issuer of the security is organized or, if permitted by the law of that
jurisdiction, the law of another jurisdiction specified by the issuer.
An issuer organized under the law of this State may specify the law of
another jurisdiction as the law governing the matters specified in
subsection (a)(2) through (5).
(e) The following rules determine a "securities intermediary's
jurisdiction" for purposes of this section:
(1) If an agreement between the securities intermediary and its
entitlement holder governing the securities account expressly
provides that a particular jurisdiction is the securities
intermediary's jurisdiction for purposes of this part, this
article, or this act, that jurisdiction is the securities
intermediary's jurisdiction.
(2) If paragraph (1) does not apply and an agreement between the
securities intermediary and its entitlement holder governing
the securities account expressly provides that the agreement
is governed by the law of a particular jurisdiction, that
jurisdiction is the securities intermediary's jurisdiction.
(3) If neither paragraph (1) nor paragraph (2) apply and an
agreement between the securities intermediary and its
entitlement holder governing the securities account expressly
provides that the securities account is maintained at an
office in a particular jurisdiction, that jurisdiction is the
securities intermediary's jurisdiction.
(4) If none of the preceding paragraphs apply, the securities
intermediary's jurisdiction is the jurisdiction in which the
office identified in an account statement as the office
serving the entitlement holder's account is located.
(5) If none of the preceding paragraphs apply, the securities
intermediary's jurisdiction is the jurisdiction in which the
chief executive office of the securities intermediary is
located.
(f) A securities intermediary's jurisdiction is not determined by the
physical location of certificates representing financial assets, or by
the jurisdiction in which is organized the issuer of the financial asset
with respect to which an entitlement holder has a security entitlement,
or by the location of facilities for data processing or other record
keeping concerning the account.
Structure New York Laws
Article 8 - Investment Securities
Part 1 - Short Title and General Matters
8-104 - Acquistion of Security or Financial Assest or Interest Therein.
8-105 - Notice of Adverse Claim.
8-107 - Whether Indorsement, Instruction, or Entitlement Order Is Effective.
8-108 - Warranties in Direct Holding.
8-109 - Warranties in Indirect Holding.
8-110 - Applicability; Choice of Law.
8-111 - Clearing Corporation Rules.
8-112 - Creditor's Legal Process.
8-113 - Statute of Frauds Generally Inapplicable.
8-114 - Evidentiary Rules Concerning Certificated Securitites.
8-115 - Securities Intermediary and Others Not Liable to Adverse Claimant.