Okla. Stat. tit. 12A § 8-401

Current through Laws 2024, c. 378.

Section 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;

(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 of this title;

(6) a demand that the issuer not register transfer has not become effective under Section 8-403 of this title, or the issuer has complied with subsection (b) of Section 8-403 of this title but no legal process or indemnity bond is obtained as provided in subsection (d) of Section 8-403 of this title; 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.

Okla. Stat. tit. 12A, § 8-401

Added by Laws 1961, p. 159, § 8-401. Amended by Laws 1984, HB 1800, c. 76, § 39, eff. 11/1/1984; Amended by Laws 1995, SB 522, c. 242, § 34, eff. 2/1/1996.

Oklahoma Code Comment

This Section is essentially the same as the pre-revision requirements for registering securities but with one significant change. The revision deleted former sub section 8-401(1)(c) and its cross-reference to former Section 8-403 on Notice of Adverse Claims, thus relieving an issuer of liability for registering a transfer when the issuer merely has notice of an adverse claim. See UCC § 8-401(a)(6). By deleting this requirement, revised Article 8 requires that adverse claimants who wish to prevent the issuer from registering the transfer must either obtain a court order enjoining the transfer pursuant to sub section 8-403(d)(1) or file an indemnity bond with the issuer pursuant to sub section 8-403(d)(2) .

The issuer's transfer registration requirements under Section 8-401 include origination by an appropriate person, reasonable assurances that signatures are genuine and effective, compliance with applicable tax laws and rightfulness of the transfer. The transfer is deemed complete upon registration of the transfer by the issuer.

Subsection (a)(1) covers instances where the only person eligible as a direct holder of securities is a clearing corporation or other restricted class of persons.

Under subsection (b), an issuer can be held liable for unreasonable delay in registration or for failing or refusing to register a transfer. Article 8 does not address the question of whether damages resulting from unreasonable delay in registration or from failing or refusing to register the transfer may extend beyond the value of the security to include also proven consequential damages. See UCC § 3-602 and the Official Comments to that Section.

Notably, the former use of "bona fide" purchaser in the language of pre-revision Article 8 has been replaced with the term "protected purchaser." The "bona fide purchaser" and "good faith" locutions have generated considerable confusion and dispute; thus, the term "bona fide" has not been retained as a term of art to describe the persons protected. See UCC § 8-303, Official and Oklahoma Comments.

The Rules of the Securities Transfer Association were revised in 1985, with the result that most variations in transfer requirements will be eliminated. The revised Rules supplement Article 8 of the Code. They attempt to provide guidance to both the transfer agent and the presenter of securities in the effective operation of the transfer function.

The revised Rules contain twelve sections, the first of which defines key terms, sets forth common transfer procedures, and explains the impact of the so-called simplification statutes, including UCC Article 8. The second section is devoted to security description and registration forms, adapted from the New York Clearing House Association's Uniform Procedures for Stockholder Description. The third section outlines transfers to and by corporations, associations, partnerships and other entities and the supporting documents which must be produced regardless of the capacity, whether fiduciary or nonfiduciary, in which they act. The next five sections deal with transfers to and by persons acting in a fiduciary capacity. These sections include rules governing transfers to and by executors/administrators, trustees, conservators/guardians, nominees, and receivers/trustees in bankruptcy. The ninth section addresses transfers to and by agents. The tenth section covers transfers to and by multiple owners. The eleventh section outlines procedures for transfers to and by life tenants. The twelfth and final section outlines rules to be followed by all insurers and securities processors when issuing securities registered in transfer-on-death form.

The Rules do not reach beyond the transfer agent's relationship to securities owners and presenters. Accordingly, they do not address: (i) the transfer agent's relationship with its issuer, (ii) the transfer agent's internal administration, and (iii) the transfer agent's compliance with applicable law and regulation and relevant rules of national securities exchanges.

Prior Statutory Provisions:

18 Okla. Stat. §§ 1.114, 1.115 (1947).

Pre-revision Section 8-401 .