2007 California Commercial Code Chapter 4. Registration

CA Codes (com:8401-8407)

8401.  (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 the following conditions are met:
   (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 endorsement 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 endorsement or
instruction is genuine and authorized (Section 8402).
   (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 8204.
   (6) A demand that the issuer not register transfer has not become
effective under Section 8403, or the issuer has complied with
subdivision (b) of Section 8403 but no legal process or indemnity
bond is obtained as provided in subdivision (d) of Section 8403.
   (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.


8402.  (a) An issuer may require the following assurance that each
necessary endorsement or each instruction is genuine and authorized:

   (1) In all cases, a guaranty of the signature of the person making
an endorsement or originating an instruction including, in the case
of an instruction, reasonable assurance of identity.
   (2) If the endorsement is made or the instruction is originated by
an agent, appropriate assurance of actual authority to sign.
   (3) If the endorsement is made or the instruction is originated by
a fiduciary pursuant to paragraph (4) or (5) of Section 8107,
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.
   (5) If the endorsement is made or the instruction is originated by
a person not covered by another provision of this subdivision,
assurance appropriate to the case corresponding as nearly as may be
to the provisions of this subdivision.
   (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:
   (A) 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.
   (B) 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 considers appropriate.



8403.  (a) 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 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 (A) the person who initiated the demand at the address provided in
the demand and (B) the person who presented the security for
registration of transfer or initiated the instruction requesting
registration of transfer a notification stating all of the following:

   (1) The certificated security has been presented for registration
of transfer or the instruction for registration of transfer of the
uncertificated security has been received.
   (2) A demand that the issuer not register transfer had previously
been received.
   (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 paragraph (3) of subdivision (b) 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
endorsement 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.
   (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 endorsement or instruction that
was not effective.


8404.  (a) Except as otherwise provided in Section 8406, 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 in any of the following
circumstances:
   (1) Pursuant to an ineffective endorsement or instruction.
   (2) After a demand that the issuer not register transfer became
effective under subdivision (a) of Section 8403(a) and the issuer did
not comply with subdivision (b) of Section 8403.
   (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.
   (4) By an issuer acting in collusion with the wrongdoer.
   (b) An issuer that is liable for wrongful registration of transfer
under subdivision (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 8210.
   (c) Except as otherwise provided in subdivision (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 endorsement or instruction.



8405.  (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 does all of the following:
   (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.
   (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 8210.  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.



8406.  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 8404 or a
claim to a new security certificate under Section 8405.



8407.  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.