2023 Illinois Compiled Statutes › Chapter 810 - COMMERCIAL CODE › 810 ILCS 5/ - Uniform Commercial Code. › Article 8 - Investment Securities

(810 ILCS 5/Art. 8 heading)
REVISED ARTICLE 8
INVESTMENT SECURITIES
(810 ILCS 5/Art. 8 Pt. 1 heading)
PART 1.  
		SHORT TITLE AND GENERAL MATTERS
(810 ILCS 5/8-101) (from Ch. 26, par. 8-101)
Sec. 8-101. 
		Short title. 
		This Article may be cited as Uniform Commercial
Code--Investment Securities.
(Source: P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-102) (from Ch. 26, par. 8-102)
Sec. 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 writing; 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 Section 8-501(b)(2) or (3), 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, 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 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) "Good faith," for purposes of the obligation of     good faith in the performance or enforcement of contracts or duties within this Article, means honesty in fact and the observance of reasonable commercial standards of fair dealing.
(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, 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.
(18) "Uncertificated security" means a security that     is not represented by a certificate.
(b) Other definitions applying to this Article and the Sections in
which they appear are:
Appropriate person            Section 8-107
Control                       Section 8-106
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 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.
(Source: P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-103) (from Ch. 26, par. 8-103)
Sec. 8-103. Rules for determining whether certain
obligations and interests are securities or financial
assets.
(a) A share or similar equity interest issued by a corporation,
business trust, joint stock company, or similar entity is a security.
(b) An "investment company security" is a security.  "Investment
company security" means a share or similar equity interest issued by an
entity that is registered as an investment company under the federal
investment company laws, an interest in a unit investment trust that is so
registered, or a face-amount certificate issued by a face-amount certificate
company that is so registered.  Investment company security does not
include an insurance policy or endowment policy or annuity contract issued
by an insurance company.
(c) An interest in a partnership or limited liability company is not a
security unless it is dealt in or traded on securities exchanges or in
securities markets, its terms expressly provide that it is a security governed
by this
Article, or it is an investment company security.  However, an interest in a
partnership or limited liability company is a financial asset if it is held in
a securities account.
(d) A writing that is a security certificate is governed by this Article and
not by Article 3, even though it also meets the requirements of that
Article.  However, a negotiable instrument governed by Article 3 is a financial
asset if it is held in a securities account.
(e) An option or similar obligation issued by a clearing corporation
to its participants is not a security, but is a financial asset.
(f) A commodity contract, as defined in Section 9-102(a)(15),
is not a
security or a financial asset.
(g)  A document of title is not a financial asset unless Section 8-102(a)(9)(iii) applies.
(Source: P.A. 95-895, eff. 1-1-09.)
(810 ILCS 5/8-104) (from Ch. 26, par. 8-104)
Sec. 8-104. 
		
		Acquisition of security or financial
asset or interest therein.
(a) A person acquires a security or an interest therein, under this
Article, if:
(1) the person is a purchaser to whom a security is     delivered pursuant to Section 8-301; or
(2) the person acquires a security entitlement to the     security pursuant to Section 8-501.
(b) A person acquires a financial asset, other than a security, or an
interest therein, under this Article, if the person acquires a security
entitlement to the financial asset.
(c) A person who acquires a security entitlement to a security or
other financial asset has the rights specified in Part 5, but is a purchaser of
any security, security entitlement, or other financial asset held by the
securities intermediary only to the extent provided in Section 8-503.
(d) Unless the context shows that a different meaning is intended, a
person who is required by other law, regulation, rule, or agreement to
transfer, deliver, present, surrender, exchange, or otherwise put in the
possession of another person a security or financial asset satisfies that
requirement by causing the other person to acquire an interest in the
security or financial asset pursuant to subsection (a) or (b).
(Source: P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-105) (from Ch. 26, par. 8-105)
Sec. 8-105. 
		Notice of adverse claim.
(a) A person has notice of an adverse claim if:
(1) the person knows of the adverse claim;
(2) the person is aware of facts sufficient to     indicate that there is a significant probability that the adverse claim exists and deliberately avoids information that would establish the existence of the adverse claim; or
(3) the person has a duty, imposed by statute or     regulation, to investigate whether an adverse claim exists, and the investigation so required would establish the existence of the adverse claim.
(b) Having knowledge that a financial asset or interest therein is or
has been transferred by a representative imposes no duty of inquiry into the
rightfulness of a transaction and is not notice of an adverse claim.  However,
a person who knows that a representative has transferred a financial asset or
interest therein in a transaction that is, or whose proceeds are being used,
for the individual benefit of the representative or otherwise in breach of
duty has notice of an adverse claim.
(c) An act or event that creates a right to immediate performance
of the principal obligation represented by a security certificate or sets a
date
on or after which the certificate is to be presented or surrendered for
redemption or exchange does not itself constitute notice of an adverse claim
except in the case of a transfer more than:
(1) one year after a date set for presentment or     surrender for redemption or exchange; or
(2) six months after a date set for payment of money     against presentation or surrender of the certificate, if money was available for payment on that date.
(d) A purchaser of a certificated security has notice of an adverse
claim if the security certificate:
(1) whether in bearer or registered form, has been     indorsed "for collection" or "for surrender" or for some other purpose not involving transfer; or
(2) is in bearer form and has on it an unambiguous     statement that it is the property of a person other than the transferor, but the mere writing of a name on the certificate is not such a statement.
(e) Filing of a financing statement under Article 9 is not notice of
an adverse claim to a financial asset.
(Source: P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-106) (from Ch. 26, par. 8-106)
Sec. 8-106. Control.
(a) A purchaser has "control" of a certificated security in bearer
form if the certificated security is delivered to the purchaser.
(b) A purchaser has "control" of a certificated security in registered
form if the certificated security is delivered to the purchaser, and:
(1) the certificate is indorsed to the purchaser or     in blank by an effective indorsement; or
(2) the certificate is registered in the name of the     purchaser, upon original issue or registration of transfer by the issuer.
(c) A purchaser has "control" of an uncertificated security if:
(1) the uncertificated security is delivered to the     purchaser; or
(2) the issuer has agreed that it will comply with     instructions originated by the purchaser without further consent by the registered owner.
(d) A purchaser has "control" of a security entitlement if:
(1) the purchaser becomes the entitlement holder;
(2) the securities intermediary has agreed that it     will comply with entitlement orders originated by the purchaser without further consent by the entitlement holder; or
(3) another person has control of the security     entitlement on behalf of the purchaser or, having previously acquired control of the security entitlement, acknowledges that it has control on behalf of the purchaser.
(e) If an interest in a security entitlement is granted by the
entitlement holder to the entitlement holder's own securities intermediary,
the securities intermediary has control.
(f) A purchaser who has satisfied the requirements of subsection (c) or
(d) has control even if the registered owner in the case of subsection (c)
or the entitlement holder in the case of subsection (d) retains the right to
make substitutions for the uncertificated security or security entitlement,
to originate instructions or entitlement orders to the issuer or securities
intermediary, or otherwise to deal with the uncertificated security or
security entitlement.
(g) An issuer or a securities intermediary may not enter into an
agreement of the kind described in subsection (c)(2) or (d)(2) without the
consent of the registered owner or entitlement holder, but an issuer or a
securities intermediary is not required to enter into such an agreement even
though the registered owner or entitlement holder so directs.  An issuer or
securities intermediary that has entered into such an agreement is not
required to confirm the existence of the agreement to another party unless
requested to do so by the registered owner or entitlement holder.
(Source: P.A. 95-331, eff. 8-21-07.)
(810 ILCS 5/8-107) (from Ch. 26, par. 8-107)
Sec. 8-107. 
		
		Whether indorsement, instruction, or
entitlement order is effective.
(a) "Appropriate person" means:
(1) with respect to an indorsement, the person     specified by a security certificate or by an effective special indorsement to be entitled to the security;
(2) with respect to an instruction, the registered     owner of an uncertificated security;
(3) with respect to an entitlement order, the     entitlement holder;
(4) if the person designated in paragraph (1), (2),     or (3) is deceased, the designated person's successor taking under other law or the designated person's personal representative acting for the estate of the decedent; or
(5) if the person designated in paragraph (1), (2),     or (3) lacks capacity, the designated person's guardian, conservator, or other similar representative who has power under other law to transfer the security or financial asset.
(b) An indorsement, instruction, or entitlement order is effective if:
(1) it is made by the appropriate person;
(2) it is made by a person who has power under the     law of agency to transfer the security or financial asset on behalf of the appropriate person, including, in the case of an instruction or entitlement order, a person who has control under Section 8-106(c)(2) or (d)(2); or
(3) the appropriate person has ratified it or is     otherwise precluded from asserting its ineffectiveness.
(c) An indorsement, instruction, or entitlement order made by a
representative is effective even if:
(1) the representative has failed to comply with a     controlling instrument or with the law of the state having jurisdiction of the representative relationship, including any law requiring the representative to obtain court approval of the transaction; or
(2) the representative's action in making the     indorsement, instruction, or entitlement order or using the proceeds of the transaction is otherwise a breach of duty.
(d) If a security is registered in the name of or specially indorsed to
a person described as a representative, or if a securities account is
maintained in the name of a person described as a representative, an
indorsement, instruction, or entitlement order made by the person is
effective even though the person is no longer serving in the described
capacity.
(e) Effectiveness of an indorsement, instruction, or entitlement
order is determined as of the date the indorsement, instruction, or
entitlement order is made, and an indorsement, instruction, or entitlement
order does not become ineffective by reason of any later change of
circumstances.
(Source: P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-108) (from Ch. 26, par. 8-108)
Sec. 8-108. 
		Warranties in direct holding.
(a) A person who transfers a certificated security to a purchaser for
value warrants to the purchaser, and an indorser, if the transfer is by
indorsement, warrants to any subsequent purchaser, that:
(1) the certificate is genuine and has not been     materially altered;
(2) the transferor or indorser does not know of any     fact that might impair the validity of the security;
(3) there is no adverse claim to the security;
(4) the transfer does not violate any restriction on     transfer;
(5) if the transfer is by indorsement, the     indorsement is made by an appropriate person, or if the indorsement is by an agent, the agent has actual authority to act on behalf of the appropriate person; and
(6) the transfer is otherwise effective and rightful.
(b) A person who originates an instruction for registration of
transfer of an uncertificated security to a purchaser for value warrants to the
purchaser that:
(1) the instruction is made by an appropriate person,     or if the instruction is by an agent, the agent has actual authority to act on behalf of the appropriate person;
(2) the security is valid;
(3) there is no adverse claim to the security; and
(4) at the time the instruction is presented to the     issuer:
(i) the purchaser will be entitled to the         registration of transfer;
(ii) the transfer will be registered by the         issuer free from all liens, security interests, restrictions, and claims other than those specified in the instruction;
(iii) the transfer will not violate any         restriction on transfer; and
(iv) the requested transfer will otherwise be         effective and rightful.
(c) A person who transfers an uncertificated security to a purchaser
for value and does not originate an instruction in connection with the
transfer warrants that:
(1) the uncertificated security is valid;
(2) there is no adverse claim to the security;
(3) the transfer does not violate any restriction on     transfer; and
(4) the transfer is otherwise effective and rightful.
(d) A person who indorses a security certificate warrants to the
issuer that:
(1) there is no adverse claim to the security; and
(2) the indorsement is effective.
(e) A person who originates an instruction for registration of
transfer of an uncertificated security warrants to the issuer that:
(1) the instruction is effective; and
(2) at the time the instruction is presented to the     issuer the purchaser will be entitled to the registration of transfer.
(f) A person who presents a certificated security for registration of
transfer or for payment or exchange warrants to the issuer that the person is
entitled to the registration, payment, or exchange, but a purchaser for value
and without notice of adverse claims to whom transfer is registered warrants
only that the person has no knowledge of any unauthorized signature in a
necessary indorsement.
(g) If a person acts as agent of another in delivering a certificated
security to a purchaser, the identity of the principal was known to the person
to whom the certificate was delivered, and the certificate delivered by the
agent was received by the agent from the principal or received by the agent
from another person at the direction of the principal, the person delivering
the security certificate warrants only that the delivering person has authority
to act for the principal and does not know of any adverse claim to the
certificated security.
(h) A secured party who redelivers a security certificate received, or
after payment and on order of the debtor delivers the security certificate to
another person, makes only the warranties of an agent under subsection (g).
(i) Except as otherwise provided in subsection (g), a broker acting
for a customer makes to the issuer and a purchaser the warranties provided
in subsections (a) through (f).  A broker that delivers a security certificate
to
its customer, or causes its customer to be registered as the owner of an
uncertificated security, makes to the customer the warranties provided in
subsection (a) or (b), and has the rights and privileges of a purchaser under
this Section.  The warranties of and in favor of the broker acting as an agent
are in addition to applicable warranties given by and in favor of the
customer.
(Source: P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-109)
Sec. 8-109. 
		Warranties in indirect holding.
(a) A person who originates an entitlement order to a securities
intermediary warrants to the securities intermediary that:
(1) the entitlement order is made by an appropriate     person, or if the entitlement order is by an agent, the agent has actual authority to act on behalf of the appropriate person; and
(2) there is no adverse claim to the security     entitlement.
(b) A person who delivers a security certificate to a securities
intermediary for credit to a securities account or originates an instruction
with respect to an uncertificated security directing that the uncertificated
security be credited to a securities account makes to the securities
intermediary the warranties specified in Section 8-108(a) or (b).
(c) If a securities intermediary delivers a security certificate to its
entitlement holder or causes its entitlement holder to be registered as the
owner of an uncertificated security, the securities intermediary makes to the
entitlement holder the warranties specified in Section 8-108(a) or (b).
(Source: P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-110)
Sec. 8-110. 
		Applicability; choice of law.
(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) 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)     applies 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 applies, 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 applies, 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.
(Source: P.A. 91-893, eff. 7-1-01.)
(810 ILCS 5/8-111)
Sec. 8-111. 
		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 this Code and affects another
party who does not consent to the rule.
(Source: P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-112)
Sec. 8-112. 
		Creditor's legal process.
(a) 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
subsection (d).  However, a certificated security for which the certificate has
been surrendered to the issuer may be reached by a creditor by legal process
upon the issuer.
(b) The interest of a debtor in an uncertificated security may be
reached by a creditor only by legal process upon the issuer at its chief
executive office in the United States, except as otherwise provided in
subsection (d).
(c) The interest of a debtor in a security entitlement may be
reached by a creditor only by legal process upon the securities intermediary
with whom the debtor's securities account is maintained, except as otherwise
provided in subsection (d).
(d) The interest of a debtor in a certificated security for which the
certificate is in the possession of a secured party, or in an uncertificated
security registered in the name of a secured party, or a security entitlement
maintained in the name of a secured party, may be reached by a creditor by
legal process upon the secured party.
(e) A creditor whose debtor is the owner of a certificated security,
uncertificated security, or security entitlement is entitled to aid from a
court
of competent jurisdiction, by injunction or otherwise, in reaching the
certificated security, uncertificated security, or security entitlement or in
satisfying the claim by means allowed at law or in equity in regard to
property that cannot readily be reached by other legal process.
(Source: P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-113)
Sec. 8-113. 
		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
modification is not capable of performance within one year of its making.
(Source: P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-114)
Sec. 8-114. 
		
		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 indorsement is admitted.
(2) If the effectiveness of a signature is put in     issue, the burden of establishing effectiveness is on the party claiming under the signature, but the signature is presumed to be genuine or authorized.
(3) If signatures on a security certificate are     admitted or established, production of the certificate entitles a holder to recover on it unless the defendant establishes a defense or a defect going to the validity of the security.
(4) If it is shown that a defense or defect exists,     the plaintiff has the burden of establishing that the plaintiff or some person under whom the plaintiff claims is a person against whom the defense or defect cannot be asserted.
(Source: P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-115)
Sec. 8-115. 
		
		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 its customer or principal, is not liable to a person having an
adverse claim to the financial asset, unless the securities intermediary, or
broker or other agent or bailee:
(1) took the action after it had been served with an     injunction, restraining order, or other legal process enjoining it from doing so, issued by a court of competent jurisdiction, and had a reasonable opportunity to act on the injunction, restraining order, or other legal process; or
(2) acted in collusion with the wrongdoer in     violating the rights of the adverse claimant; or
(3) in the case of a security certificate that has     been stolen, acted with notice of the adverse claim.
(Source: P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-116)
Sec. 8-116. 
		
		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 intermediary that acquires a security entitlement to a financial
asset from another securities intermediary acquires the security entitlement
for value if the securities intermediary acquiring the security entitlement
establishes a security entitlement to the financial asset in favor of an
entitlement holder.
(Source: P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/Art. 8 Pt. 2 heading)
PART 2.  
		ISSUE AND ISSUER
(810 ILCS 5/8-201) (from Ch. 26, par. 8-201)
Sec. 8-201. 
		Issuer.
(a) With respect to an obligation on or a defense to a security, an
"issuer" includes a person that:
(1) places or authorizes the placing of its name on a     security certificate, other than as authenticating trustee, registrar, transfer agent, or the like, to evidence a share, participation, or other interest in its property or in an enterprise, or to evidence its duty to perform an obligation represented by the certificate;
(2) creates a share, participation, or other interest     in its property or in an enterprise, or undertakes an obligation, that is an uncertificated security;
(3) directly or indirectly creates a fractional     interest in its rights or property, if the fractional interest is represented by a security certificate; or
(4) becomes responsible for, or in place of, another     person described as an issuer in this Section.
(b) With respect to an obligation on or defense to a security, a
guarantor is an issuer to the extent of its guaranty, whether or not its
obligation is noted on a security certificate.
(c) With respect to a registration of a transfer, issuer means a
person on whose behalf transfer books are maintained.
(Source: P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-202) (from Ch. 26, par. 8-202)
Sec. 8-202. 
		
		Issuer's responsibility and defenses; notice of defect or
defense.
(a) 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 to another
instrument, indenture, or document or to a constitution, statute, ordinance,
rule, regulation, order, or the like, to the extent the terms referred to do
not conflict with terms stated on the certificate.  A reference under this
subsection does not of itself charge a purchaser for value with notice of a
defect going to the validity of the security, even if the certificate expressly
states that a person accepting it admits notice.  The terms of an
uncertificated security include those stated in any instrument, indenture, or
document or in a constitution, statute, ordinance, rule, regulation, order, or
the like, pursuant to which the security is issued.
(b) The following rules apply if an issuer asserts that a security is
not valid:
(1) A security other than one issued by a government     or governmental subdivision, agency, or instrumentality, even though issued with a defect going to its validity, is valid in the hands of a purchaser for value and without notice of the particular defect unless the defect involves a violation of a constitutional provision. In that case, the security is valid in the hands of a purchaser for value and without notice of the defect, other than one who takes by original issue.
(2) Paragraph (1) applies to an issuer that is a     government or governmental subdivision, agency, or instrumentality only if there has been substantial compliance with the legal requirements governing the issue or the issuer has received a substantial consideration for the issue as a whole or for the particular security and a stated purpose of the issue is one for which the issuer has power to borrow money or issue the security.
(c) Except as otherwise provided in Section 8-205, lack of
genuineness of a certificated security is a complete defense, even against a
purchaser for value and without notice.
(d) All other defenses of the issuer of a security, including
nondelivery and conditional delivery of a certificated security, are
ineffective against a purchaser for value who has taken the certificated
security without notice of the particular defense.
(e) This Section does not affect the right of a party to cancel a
contract for a security "when, as and if issued" or "when distributed" in the
event of a material change in the character of the security that is the subject
of the contract or in the plan or arrangement pursuant to which the security
is to be issued or distributed.
(f) If a security is held by a securities intermediary against whom an
entitlement holder has a security entitlement with respect to the security, the
issuer may not assert any defense that the issuer could not assert if the
entitlement holder held the security directly.
(Source: P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-203) (from Ch. 26, par. 8-203)
Sec. 8-203. 
		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 presented or surrendered for redemption or exchange, a
purchaser is charged with notice of any defect in its issue or defense of the
issuer, if the act or event:
(1) requires the payment of money, the delivery of a     certificated security, the registration of transfer of an uncertificated security, or any of them on presentation or surrender of the security certificate, the money or security is available on the date set for payment or exchange, and the purchaser takes the security more than one year after that date; or
(2) is not covered by paragraph (1) and the purchaser     takes the security more than 2 years after the date set for surrender or presentation or the date on which performance became due.
(Source: P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-204) (from Ch. 26, par. 8-204)
Sec. 8-204. 
		Effect of issuer's restriction on transfer. 
		A restriction on 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 noted conspicuously on the security certificate; or
(2) the security is uncertificated and the registered     owner has been notified of the restriction.
(Source: P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-205) (from Ch. 26, par. 8-205)
Sec. 8-205. 
		
		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 purchaser is without notice of the lack of authority and the signing has
been done by:
(1) an authenticating trustee, registrar, transfer     agent, or other person entrusted by the issuer with the signing of the security certificate or of similar security certificates, or the immediate preparation for signing of any of them; or
(2) an employee of the issuer, or of any of the     persons listed in paragraph (1), entrusted with responsible handling of the security certificate.
(Source: P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-206) (from Ch. 26, par. 8-206)
Sec. 8-206. 
		
		Completion or alteration of security
certificate.
(a) If a security certificate contains the signatures necessary to its
issue or transfer but is incomplete in any other respect:
(1) any person may complete it by filling in the     blanks as authorized; and
(2) even if the blanks are incorrectly filled in, the     security certificate as completed is enforceable by a purchaser who took it for value and without notice of the incorrectness.
(b) A complete security certificate that has been improperly altered, even
if fraudulently, remains enforceable, but only according to its original
terms.
(Source: P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-207) (from Ch. 26, par. 8-207)
Sec. 8-207. 
		Rights and duties of issuer with respect to registered owners.
(a) 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 indenture
trustee may treat the registered owner as the person exclusively entitled to
vote, receive notifications, and otherwise exercise all the rights and powers
of an owner.
(b) This Article does not affect the liability of the registered owner
of a security for a call, assessment, or the like.
(Source: P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-208) (from Ch. 26, par. 8-208)
Sec. 8-208. 
		
		Effect of signature of authenticating trustee, registrar,
or transfer agent.
(a) 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 without notice of a particular
defect, that:
(1) the certificate is genuine;
(2) the person's own participation in the issue of     the security is within the person's capacity and within the scope of the authority received by the person from the issuer; and
(3) the person has reasonable grounds to believe that     the certificated security is in the form and within the amount the issuer is authorized to issue.
(b) Unless otherwise agreed, a person signing under subsection (a) does
not assume responsibility for the validity of the security in other respects.
(Source: P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-209)
Sec. 8-209. 
		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.
(Source: P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-210)
Sec. 8-210. 
		Overissue.
(a) In this Section, "overissue" means the issue of securities in
excess of the amount the issuer has corporate power to issue, but an
overissue does not occur if appropriate action has cured the overissue.
(b) Except as otherwise provided in subsections (c) and (d), the
provisions of this Article which validate a security or compel its issue or
reissue do not apply to the extent that validation, issue, or reissue would
result in overissue.
(c) If an identical security not constituting an overissue is
reasonably available for purchase, a person entitled to issue or validation
may compel the issuer to purchase the security and deliver it if certificated
or register its transfer if uncertificated, against surrender of any security
certificate the person holds.
(d) If a security is not reasonably available for purchase, a person
entitled to issue or validation may recover from the issuer the price the
person or the last purchaser for value paid for it with interest from the date
of the person's demand.
(Source: P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/Art. 8 Pt. 3 heading)
PART 3.  
		TRANSFER OF CERTIFICATED
AND UNCERTIFICATED SECURITIES
(810 ILCS 5/8-301) (from Ch. 26, par. 8-301)
Sec. 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 (i) registered in the name of the purchaser, (ii) payable to the order of the purchaser, or (iii) specially indorsed to the purchaser by an effective indorsement and has not been indorsed to the securities intermediary or in blank.
(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.
(Source: P.A. 91-893, eff. 7-1-01.)
(810 ILCS 5/8-302) (from Ch. 26, par. 8-302)
Sec. 8-302. 
		Rights of purchaser.
(a) Except as otherwise provided in subsections (b) and (c), of a
certificated or uncertificated security acquires all rights in the security
that the transferor had or had
power to transfer.
(b) A purchaser of a limited interest acquires rights only to the
extent of the interest purchased.
(c) A purchaser of a certificated security who as a previous holder
had notice of an adverse claim does not improve its position by taking from
a protected purchaser.
(Source: P.A. 91-893, eff. 7-1-01.)
(810 ILCS 5/8-303) (from Ch. 26, par. 8-303)
Sec. 8-303. 
		Protected purchaser.
(a) "Protected purchaser" means a purchaser of a certificated or
uncertificated security, or of an interest therein, who:
(1) gives value;
(2) does not have notice of any adverse claim to the     security; and
(3) obtains control of the certificated or     uncertificated security.
(b) In addition to acquiring the rights of a purchaser, a protected
purchaser also acquires its interest in the security free of any adverse
claim.
(Source: P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-304) (from Ch. 26, par. 8-304)
Sec. 8-304. 
		Indorsement.
(a) An indorsement may be in blank or special.  An indorsement in
blank includes an indorsement to bearer.  A special indorsement specifies to
whom a security is to be transferred or who has power to transfer it.  A
holder may convert a blank indorsement to a special indorsement.
(b) An indorsement purporting to be only of part of a security
certificate representing units intended by the issuer to be separately
transferable is effective to the extent of the indorsement.
(c) An indorsement, whether special or in blank, does not
constitute a transfer until delivery of the certificate on which it appears or,
if
the indorsement is on a separate document, until delivery of both the
document and the certificate.
(d) If a security certificate in registered form has been delivered to
a purchaser without a necessary indorsement, the purchaser may become a
protected purchaser only when the indorsement is supplied.  However,
against a transferor, a transfer is complete upon delivery and the purchaser
has a specifically enforceable right to have any necessary indorsement
supplied.
(e) An indorsement of a security certificate in bearer form may give
notice of an adverse claim to the certificate, but it does not otherwise affect
a right to registration that the holder possesses.
(f) Unless otherwise agreed, a person making an indorsement
assumes only the obligations provided in Section 8-108 and not an obligation
that the security will be honored by the issuer.
(Source: P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-305) (from Ch. 26, par. 8-305)
Sec. 8-305. 
		Instruction.
(a) 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.
(b) Unless otherwise agreed, a person initiating an instruction
assumes only the obligations imposed by Section 8-108 and not an obligation
that the security will be honored by the issuer.
(Source: P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-306) (from Ch. 26, par. 8-306)
Sec. 8-306. 
		
		Effect of guaranteeing signature,
indorsement, or instruction.
(a) A person who guarantees a signature of an indorser of a
security certificate warrants that at the time of signing:
(1) the signature was genuine;
(2) the signer was an appropriate person to indorse,     or if the signature is by an agent, the agent had actual authority to act on behalf of the appropriate person; and
(3) the signer had legal capacity to sign.
(b) A person who guarantees a signature of the originator of an
instruction warrants that at the time of signing:
(1) the signature was genuine;
(2) the signer was an appropriate person to originate     the instruction, or if the signature is by an agent, the agent had actual authority to act on behalf of the appropriate person, if the person specified in the instruction as the registered owner was, in fact, the registered owner, as to which fact the signature guarantor does not make a warranty; and
(3) the signer had legal capacity to sign.
(c) A person who specially guarantees the signature of an originator
of an instruction makes the warranties of a signature guarantor under
subsection (b) and also warrants that at the time the instruction is presented
to the issuer:
(1) the person specified in the instruction as the     registered owner of the uncertificated security will be the registered owner; and
(2) the transfer of the uncertificated security     requested in the instruction will be registered by the issuer free from all liens, security interests, restrictions, and claims other than those specified in the instruction.
(d) A guarantor under subsections (a) and (b) or a special
guarantor under subsection (c) does not otherwise warrant the rightfulness
of the transfer.
(e) A person who guarantees an indorsement of a security
certificate makes the warranties of a signature guarantor under subsection
(a) and also warrants the rightfulness of the transfer in all respects.
(f) A person who guarantees an instruction requesting the transfer
of an uncertificated security makes the warranties of a special signature
guarantor under subsection (c) and also warrants the rightfulness of the
transfer in all respects.
(g) An issuer may not require a special guaranty of signature, a
guaranty of indorsement, or a guaranty of instruction as a condition to
registration of transfer.
(h) The warranties under this Section are made to a person taking
or dealing with the security  in reliance on the guaranty, and the guarantor is
liable to the person for loss resulting from their breach.  An indorser or
originator of an instruction whose signature, indorsement, or instruction has
been guaranteed is liable to a guarantor for any loss suffered by the
guarantor as a result of breach of the warranties of the guarantor.
(Source: P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-307) (from Ch. 26, par. 8-307)
Sec. 8-307. 
		
		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 the security, but if the transfer is not for
value, a transferor need not comply unless the purchaser pays the necessary
expenses.  If the transferor fails within a reasonable time to comply with the
demand, the purchaser may reject or rescind the transfer.
(Source: P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-308) (from Ch. 26, par. 8-308)
Sec. 8-308. 
		(Repealed).
(Source: P.A. 85-997. Repealed by P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-309) (from Ch. 26, par. 8-309)
Sec. 8-309. 
		(Repealed).
(Source: P.A. 85-997. Repealed by P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-310) (from Ch. 26, par. 8-310)
Sec. 8-310. 
		(Repealed).
(Source: P.A. 85-997. Repealed by P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-311) (from Ch. 26, par. 8-311)
Sec. 8-311. 
		(Repealed).
(Source: P.A. 85-997. Repealed by P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-312) (from Ch. 26, par. 8-312)
Sec. 8-312. 
		(Repealed).
(Source: P.A. 85-997. Repealed by P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-313) (from Ch. 26, par. 8-313)
Sec. 8-313. 
		(Repealed).
(Source: P.A. 85-997. Repealed by P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-314) (from Ch. 26, par. 8-314)
Sec. 8-314. 
		(Repealed).
(Source: P.A. 85-997. Repealed by P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-315) (from Ch. 26, par. 8-315)
Sec. 8-315. 
		(Repealed).
(Source: P.A. 85-997. Repealed by P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-316) (from Ch. 26, par. 8-316)
Sec. 8-316. 
		(Repealed).
(Source: P.A. 85-997. Repealed by P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-317) (from Ch. 26, par. 8-317)
Sec. 8-317. 
		(Repealed).
(Source: P.A. 85-997. Repealed by P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-318) (from Ch. 26, par. 8-318)
Sec. 8-318. 
		(Repealed).
(Source: P.A. 85-997. Repealed by P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-319) (from Ch. 26, par. 8-319)
Sec. 8-319. 
		(Repealed).
(Source: P.A. 85-997. Repealed by P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-320) (from Ch. 26, par. 8-320)
Sec. 8-320. 
		(Repealed).
(Source: P.A. 85-997. Repealed by P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-321) (from Ch. 26, par. 8-321)
Sec. 8-321. 
		(Repealed).
(Source: P.A. 85-997. Repealed by P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/Art. 8 Pt. 4 heading)
PART 4.  
		REGISTRATION
(810 ILCS 5/8-401) (from Ch. 26, par. 8-401)
Sec. 8-401. 
		Duty of issuer to register transfer.
(a) 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 shall register the transfer as requested if:
(1) under the terms of the security the person     seeking registration of transfer is eligible to have the security registered in its name;
(2) the indorsement or instruction is made by the     appropriate person or by an agent who has actual authority to act on behalf of the appropriate person;
(3) reasonable assurance is given that the     indorsement or instruction is genuine and authorized (Section 8-402);
(4) any applicable law relating to the collection of     taxes has been complied with;
(5) the transfer does not violate any restriction on     transfer imposed by the issuer in accordance with Section 8-204;
(6) a demand that the issuer not register transfer     has not become effective under Section 8-403, or the issuer has complied with Section 8-403(b) but no legal process or indemnity bond is obtained as provided in Section 8-403(d); and
(7) the transfer is in fact rightful or is to a     protected purchaser.
(b) If an issuer is under a duty to register a transfer of a security,
the issuer is liable to a person presenting a certificated security or an
instruction for registration or to the person's principal for loss resulting
from
unreasonable delay in registration or failure or refusal to register the
transfer.
(Source: P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-402) (from Ch. 26, par. 8-402)
Sec. 8-402. 
		
		Assurance that indorsement or
instruction is effective.
(a) An issuer may require the following assurance that each
necessary indorsement or each instruction is genuine and authorized:
(1) in all cases, a guaranty of the signature of the     person making an indorsement or originating an instruction including, in the case of an instruction, reasonable assurance of identity;
(2) if the indorsement is made or the instruction is     originated by an agent, appropriate assurance of actual authority to sign;
(3) if the indorsement is made or the instruction is     originated by a fiduciary pursuant to Section 8-107(a)(4) or (a)(5), appropriate evidence of appointment or incumbency;
(4) if there is more than one fiduciary, reasonable     assurance that all who are required to sign have done so; and
(5) if the indorsement is made or the instruction is     originated by a person not covered by another provision of this subsection, assurance appropriate to the case corresponding as nearly as may be to the provisions of this subsection.
(b) An issuer may elect to require reasonable assurance beyond
that specified in this Section.
(c) In this Section:
(1) "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 responsibility if they are not manifestly unreasonable.
(2) "Appropriate evidence of appointment or     incumbency" means:
(i) in the case of a fiduciary appointed or         qualified by a court, a certificate issued by or under the direction or supervision of the court or an officer thereof and dated within 60 days before the date of presentation for transfer; or
(ii) in any other case, a copy of a document         showing the appointment or a certificate issued by or on behalf of a person reasonably believed by an issuer to be responsible or, in the absence of that document or certificate, other evidence the issuer reasonably considered appropriate.
(Source: P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-403) (from Ch. 26, par. 8-403)
Sec. 8-403. 
		Demand that issuer not register transfer.
(a) A person who is an appropriate person to make an indorsement
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
registered owner and the issue of which the security is a part and provides
an address for communications directed to the person making the demand.
The demand is effective only if it is received by the issuer at a time and in a
manner affording the issuer reasonable opportunity to act on it.
(b) 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 after
a demand that the issuer not register transfer has become effective, the issuer
shall promptly communicate to (i) the person who initiated the demand at
the address provided in the demand and (ii) the person who presented the
security for registration of transfer or initiated the instruction requesting
registration of transfer a notification stating that:
(1) the certificated security has been presented for     registration of transfer or instruction for registration of transfer of uncertificated security has been received;
(2) a demand that the issuer not register transfer     had previously been received; and
(3) the issuer will withhold registration of transfer     for a period of time stated in the notification in order to provide the person who initiated the demand an opportunity to obtain legal process or an indemnity bond.
(c) The period described in subsection (b)(3) may not exceed 30
days after the date of communication of the notification.  A shorter period
may be specified by the issuer if it is not manifestly unreasonable.
(d) An issuer is not liable to a person who initiated a demand that
the issuer not register transfer for any loss the person suffers as a result of
registration of a transfer pursuant to an effective indorsement or instruction
if the person who initiated the demand does not, within the time stated in
the issuer's communication, either:
(1) obtain an appropriate restraining order,     injunction, or other process from a court of competent jurisdiction enjoining the issuer from registering the transfer; or
(2) file with the issuer an indemnity bond,     sufficient in the issuer's judgment to protect the issuer and any transfer agent, registrar, or other agent of the issuer involved from any loss it or they may suffer by refusing to register the transfer.
(e) This Section does not relieve an issuer from liability for
registering transfer pursuant to an indorsement or instruction that was not
effective.
(Source: P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-404) (from Ch. 26, par. 8-404)
Sec. 8-404. 
		Wrongful registration.
(a) Except as otherwise provided in Section 8-406, 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:
(1) pursuant to an ineffective indorsement or     instruction;
(2) after a demand that the issuer not register     transfer became effective under Section 8-403(a) and the issuer did not comply with Section 8-403(b);
(3) after the issuer had been served with an     injunction, restraining order, or other legal process enjoining it from registering the transfer, issued by a court of competent jurisdiction, and the issuer had a reasonable opportunity to act on the injunction, restraining order, or other legal process; or
(4) by an issuer acting in collusion with the     wrongdoer.
(b) An issuer that is liable for wrongful registration of transfer
under subsection (a) on demand shall provide the person entitled to the
security with a like certificated or uncertificated security, and any payments
or distributions that the person did not receive as a result of the wrongful
registration.  If an overissue would result, the issuer's liability to provide
the person with a like security is governed by Section 8-210.
(c) Except as otherwise provided in subsection (a) or in a law
relating to the collection of taxes, an issuer is not liable to an owner or
other person suffering loss as a result of the registration of a transfer of a
security if registration was made pursuant to an effective indorsement or
instruction.
(Source: P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-405) (from Ch. 26, par. 8-405)
Sec. 8-405. 
		
		Replacement of lost, destroyed, or
wrongfully taken security certificate.
(a) 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 the owner:
(1) so requests before the issuer has notice that the     certificate has been acquired by a protected purchaser;
(2) files with the issuer a sufficient indemnity     bond; and
(3) satisfies other reasonable requirements imposed     by the issuer.
(b) If, after the issue of a new security certificate, a protected
purchaser of the original certificate presents it for registration of transfer,
the issuer shall register the transfer unless an overissue would result. In
that case, the issuer's liability is governed by Section 8-210.  In addition to
any rights on the indemnity bond, an issuer may recover the new certificate
from a person to whom it was issued or any person taking under that person,
except a protected purchaser.
(Source: P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-406) (from Ch. 26, par. 8-406)
Sec. 8-406. 
		
		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 notice of it
and the issuer registers a transfer of the security before receiving
notification, the owner may not assert against the issuer a claim for
registering the transfer under Section 8-404 or a claim to a new security
certificate under Section 8-405.
(Source: P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-407) (from Ch. 26, par. 8-407)
Sec. 8-407. 
		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 securities, or in the cancellation of surrendered security
certificates has the same obligation to the holder or owner of a certificated
or uncertificated security with regard to the particular functions performed
as the issuer has in regard to those functions.
(Source: P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-408) (from Ch. 26, par. 8-408)
Sec. 8-408. 
		(Repealed).
(Source: P.A. 85-997. Repealed by P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-409) (from Ch. 26, par. 8-409)
Sec. 8-409. 
		(Repealed).
(Source: P.A. 85-1209. Repealed by P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/Art. 8 Pt. 5 heading)
PART 5.  
		SECURITY ENTITLEMENTS
(810 ILCS 5/8-501)
Sec. 8-501. 
		
		Securities account; acquisition of
security entitlement from securities intermediary.
(a) "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 undertakes to treat the person for whom the
account is maintained as entitled to exercise the rights that comprise the
financial asset.
(b) Except as otherwise provided in subsections (d) and (e), a
person acquires a security entitlement if a securities intermediary:
(1) indicates by book entry that a financial asset     has been credited to the person's securities account;
(2) receives a financial asset from the person or     acquires a financial asset for the person and, in either case, accepts it for credit to the person's securities account; or
(3) becomes obligated under other law, regulation, or     rule to credit a financial asset to the person's securities account.
(c) If a condition of subsection (b) has been met, a person has a
security entitlement even though the securities intermediary does not itself
hold the financial asset.
(d) If a securities intermediary holds a financial asset for another
person, and the financial asset is registered in the name of, payable to the
order of, or specially indorsed to the other person, and has not been
indorsed to the securities intermediary or in blank, the other person is
treated as holding the financial asset directly rather than as having a
security entitlement with respect to the financial asset.
(e) Issuance of a security is not establishment of a security
entitlement.
(Source: P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-502)
Sec. 8-502. 
		
		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 entitlement under Section 8-501 for value and without
notice of the adverse claim.
(Source: P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-503)
Sec. 8-503. 
		
		Property interest of entitlement
holder in financial asset held by securities
intermediary.
(a) 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 held by the securities intermediary are held
by the securities intermediary for the entitlement holders, are not property
of the securities intermediary, and are not subject to claims of creditors of
the securities intermediary, except as otherwise provided in Section 8-511.
(b) An entitlement holder's property interest with respect to a
particular financial asset under subsection (a) is a pro rata property interest
in all interests in that financial asset held by the securities intermediary,
without regard to the time the entitlement holder acquired the security
entitlement or the time the securities intermediary acquired the interest in
that financial asset.
(c) An entitlement holder's property interest with respect to a
particular financial asset under subsection (a) may be enforced against the
securities intermediary only by exercise of the entitlement holder's rights
under Sections 8-505 through 8-508.
(d) An entitlement holder's property interest with respect to a
particular financial asset under subsection (a) may be enforced against a
purchaser of the financial asset or interest therein only if:
(1) insolvency proceedings have been initiated by or     against the securities intermediary;
(2) the securities intermediary does not have     sufficient interests in the financial asset to satisfy the security entitlements of all of its entitlement holders to that financial asset;
(3) the securities intermediary violated its     obligations under Section 8-504 by transferring the financial asset or interest therein to the purchaser; and
(4) the purchaser is not protected under subsection     (e). The trustee or other liquidator, acting on behalf of all entitlement holders having security entitlements with respect to a particular financial asset, may recover the financial asset, or interest therein, from the purchaser.  If the trustee or other liquidator elects not to pursue that right, an entitlement holder whose security entitlement remains unsatisfied has the right to recover its interest in the financial asset from the purchaser.
(e) An action based on the entitlement holder's property interest
with respect to a particular financial asset under subsection (a), whether
framed in conversion, replevin, constructive trust, equitable lien, or other
theory, may not be asserted against any purchaser of a financial asset or
interest therein who gives value, obtains control, and does not act in
collusion with the securities intermediary in violating the securities
intermediary's obligations under Section 8-504.
(Source: P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-504)
Sec. 8-504. 
		
		Duty of securities intermediary to
maintain financial asset.
(a) 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 entitlement holders
with respect to that financial asset.  The securities intermediary may
maintain those financial assets directly or through one or more other
securities intermediaries.
(b) Except to the extent otherwise agreed by its entitlement holder,
a securities intermediary may not grant any security interests in a financial
asset it is obligated to maintain pursuant to subsection (a).
(c) A securities intermediary satisfies the duty in subsection (a) if:
(1) the securities intermediary acts with respect to     the duty as agreed upon by the entitlement holder and the securities intermediary; or
(2) in the absence of agreement, the securities     intermediary exercises due care in accordance with reasonable commercial standards to obtain and maintain the financial asset.
(d) This Section does not apply to a clearing corporation that is
itself the obligor of an option or similar obligation to which its entitlement
holders have security entitlements.
(Source: P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-505)
Sec. 8-505. 
		
		Duty of securities intermediary with
respect to payments and distributions.
(a) 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:
(1) the securities intermediary acts with respect to     the duty as agreed upon by the entitlement holder and the securities intermediary; or
(2) in the absence of agreement, the securities     intermediary exercises due care in accordance with reasonable commercial standards to attempt to obtain the payment or distribution.
(b) A securities intermediary is obligated to its entitlement holder
for a payment or distribution made by the issuer of a financial asset if the
payment or distribution is received by the securities intermediary.
(Source: P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-506)
Sec. 8-506. 
		
		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 securities intermediary acts with respect to     the duty as agreed upon by the entitlement holder and the securities intermediary; or
(2) in the absence of agreement, the securities     intermediary either places the entitlement holder in a position to exercise the rights directly or exercises due care in accordance with reasonable commercial standards to follow the direction of the entitlement holder.
(Source: P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-507)
Sec. 8-507. 
		
		Duty of securities intermediary to
comply with entitlement order.
(a) 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 itself that
the entitlement order is genuine and authorized, and the securities
intermediary has had reasonable opportunity to comply with the entitlement
order.  A securities intermediary satisfies the duty if:
(1) the securities intermediary acts with respect to     the duty as agreed upon by the entitlement holder and the securities intermediary; or
(2) in the absence of agreement, the securities     intermediary exercises due care in accordance with reasonable commercial standards to comply with the entitlement order.
(b) If a securities intermediary transfers a financial asset pursuant
to an ineffective entitlement order, the securities intermediary shall
reestablish a security entitlement in favor of the person entitled to it, and
pay or credit any payments or distributions that the person did not receive
as a result of the wrongful transfer.  If the securities intermediary does not
reestablish a security entitlement, the securities intermediary is liable to
the entitlement holder for damages.
(Source: P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-508)
Sec. 8-508. 
		
		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 an entitlement holder to change a security entitlement into another
available form of holding for which the entitlement holder is eligible, or to
cause the financial asset to be transferred to a securities account of the
entitlement holder with another securities intermediary.  A securities
intermediary satisfies the duty if:
(1) the securities intermediary acts as agreed upon     by the entitlement holder and the securities intermediary; or
(2) in the absence of agreement, the securities     intermediary exercises due care in accordance with reasonable commercial standards to follow the direction of the entitlement holder.
(Source: P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-509)
Sec. 8-509. 
		
		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.
(a) If the substance of a duty imposed upon a securities
intermediary by Sections 8-504 through 8-508 is the subject of other statute,
regulation, or rule, compliance with that statute, regulation, or rule
satisfies the duty.
(b) To the extent that specific standards for the performance of the
duties of a securities intermediary or the exercise of the rights of an
entitlement holder are not specified by other statute, regulation, or rule or
by agreement between the securities intermediary and entitlement holder,
the securities intermediary shall perform its duties and the entitlement
holder shall exercise its rights in a commercially reasonable manner.
(c) The obligation of a securities intermediary to perform the duties
imposed by Sections 8-504 through 8-508 is subject to:
(1) rights of the securities intermediary arising out     of a security interest under a security agreement with the entitlement holder or otherwise; and
(2) rights of the securities intermediary under other     law, regulation, rule, or agreement to withhold performance of its duties as a result of unfulfilled obligations of the entitlement holder to the securities intermediary.
(d) Sections 8-504 through 8-508 do not require a securities
intermediary to take any action that is prohibited by other statute,
regulation, or rule.
(Source: P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-510)
Sec. 8-510. 
		
		Rights of purchaser of security
entitlement from entitlement holder.
(a) In a case not covered by the priority rules in Article 9 or the
rules stated in subsection (c), an
action based on an adverse claim to a financial asset or
security entitlement, whether framed in conversion, replevin, constructive
trust, equitable lien, or other theory, may not be asserted against a person
who purchases a security entitlement, or an interest therein, from an
entitlement holder if the purchaser gives value, does not have notice of the
adverse claim, and obtains control.
(b) If an adverse claim could not have been asserted against an
entitlement holder under Section 8-502, the adverse claim cannot be asserted
against a person who purchases a security entitlement, or an interest therein,
from the entitlement holder.
(c) In a case not covered by the priority rules in Article 9, a
purchaser for value of a security entitlement, or an interest therein, who
obtains control has priority over a purchaser of a security entitlement, or an
interest therein, who does not obtain control.  Except as otherwise provided
in subsection (d), purchasers who have control rank
according to priority in time of:
(1) the purchaser's becoming the person for whom the     securities account, in which the security entitlement is carried, is maintained, if the purchaser obtained control under Section 8-106(d)(1);
(2) the securities intermediary's agreement to comply     with the purchaser's entitlement orders with respect to security entitlements carried or to  be carried in the securities account in which the security entitlement is carried, if the purchaser obtained control under Section 8-106(d)(2); or
(3) if the purchaser obtained control through another     person under Section 8-106(d)(3), the time on which priority would be based under this subsection if the other person were the secured party.
(d) A securities intermediary as purchaser
has priority over a conflicting purchaser who has control unless otherwise
agreed by the securities intermediary.
(Source: P.A. 91-893, eff. 7-1-01.)
(810 ILCS 5/8-511)
Sec. 8-511. 
		
		Priority
among security interests and
entitlement holders.
(a) Except as otherwise provided in subsections (b) and (c), if a
securities intermediary does not have sufficient interests in a particular
financial asset to satisfy both its obligations to entitlement holders who have
security entitlements to that financial asset and its obligation to a creditor
of the securities intermediary who has a security interest in that financial
asset, the claims of entitlement holders, other than the creditor, have
priority over the claim of the creditor.
(b)  A claim of a creditor of a securities intermediary who has a
security interest in a financial asset held by a securities intermediary has
priority over claims of the securities intermediary's entitlement holders who
have security entitlements with respect to that financial asset if the creditor
has control over the financial asset.
(c) If a clearing corporation does not have sufficient financial assets
to satisfy both its obligations to entitlement holders who have security
entitlements with respect to a financial asset and its obligation to a creditor
of the clearing corporation who has a security interest in that financial
asset, the claim of the creditor has priority over the claims of entitlement
holders.
(Source: P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/Art. 8 Pt. 6 heading)
PART 6.  
		TRANSITION PROVISIONS FOR REVISED ARTICLE 8 AND
CONFORMING AMENDMENTS TO ARTICLES 1, 5, 9, AND 10
(810 ILCS 5/8-601)
Sec. 8-601. 
		Effective date. 
		(Blank).
(Source: P.A. 89-364, eff. 1-1-96.)
(810 ILCS 5/8-602)
Sec. 8-602. 
		Repeals. 
		(See Section 60 of Public Act 89-364 for repeal of
certain Sections of Article 8 of the Uniform Commercial Code.)
(Source: P.A. 89-364, eff. 1-1-96; 89-626, eff. 8-9-96.)
(810 ILCS 5/8-603)
Sec. 8-603. 
		Savings clause.
(a) This amendatory Act of 1995 does not affect an action or proceeding
commenced
before this amendatory Act of 1995 takes effect.
(b)  If a security interest in a security is perfected at the date this
amendatory Act of 1995 takes effect, and the action by which the security
interest was
perfected would suffice to perfect a security interest under this amendatory
Act of 1995, no
further action is required to continue perfection.  If a security interest in a
security is perfected at the date this amendatory Act of 1995 takes effect but
the action by
which the security interest was perfected would not suffice to perfect a
security interest under this amendatory Act of 1995, the security interest
remains perfected
for a period of 4 months after the effective date and continues perfected
thereafter if appropriate action to perfect under this amendatory Act of 1995
is taken within
that period.  If
a security interest is perfected at the date this amendatory Act of 1995 takes
effect and the
security interest can be perfected by filing under this amendatory Act of 1995,
a financing
statement signed by the secured party instead of the debtor may be filed
within that period to continue perfection or thereafter to perfect.
(Source: P.A. 89-364, eff. 1-1-96.)