2023 New York Laws › UCC - Uniform Commercial Code › Article 8 - Investment Securities › Part 1 - Short Title and General Matters › 8-108 - Warranties in Direct Holding.

Section 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.