C.R.S. Section 4-8-108
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) of this section.

(i)

Except as otherwise provided in subsection (g) of this section, a broker acting for a customer makes to the issuer and a purchaser the warranties provided in subsections (a) through (f) of this section. 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) of this section, 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: Section 4-8-108 — Warranties in direct holding, https://leg.­colorado.­gov/sites/default/files/images/olls/crs2023-title-04.­pdf (accessed Oct. 20, 2023).

4‑8‑101
Short title
4‑8‑102
Definitions
4‑8‑103
Rules for determining whether certain obligations and interests are securities or financial assets
4‑8‑104
Acquisition of security or financial asset or interest therein
4‑8‑105
Notice of adverse claim
4‑8‑106
Control
4‑8‑107
Whether indorsement, instruction, or entitlement order is effective
4‑8‑108
Warranties in direct holding
4‑8‑109
Warranties in indirect holding
4‑8‑110
Applicability - choice of law
4‑8‑111
Clearing corporation rules
4‑8‑112
Creditor’s legal process
4‑8‑113
Statute of frauds inapplicable
4‑8‑114
Evidentiary rules concerning certificated securities
4‑8‑115
Securities intermediary and others not liable to adverse claimant
4‑8‑116
Securities intermediary as purchaser for value
4‑8‑201
Issuer
4‑8‑202
Issuer’s responsibility and defenses - notice of defect or defense
4‑8‑203
Staleness as notice of defect or defense
4‑8‑204
Effect of issuer’s restriction on transfer
4‑8‑205
Effect of unauthorized signature on security certificate
4‑8‑206
Completion or alteration of security certificate
4‑8‑207
Rights and duties of issuer with respect to registered owners
4‑8‑208
Effect of signature of authenticating trustee, registrar, or transfer agent
4‑8‑209
Issuer’s lien
4‑8‑210
Overissue
4‑8‑301
Delivery
4‑8‑302
Rights of purchaser
4‑8‑303
Protected purchaser
4‑8‑304
Indorsement
4‑8‑305
Instruction
4‑8‑306
Effect of guaranteeing signature, indorsement, or instruction
4‑8‑307
Purchaser’s right to requisites for registration of transfer
4‑8‑401
Duty of issuer to register transfer
4‑8‑402
Assurance that indorsement or instruction is effective
4‑8‑403
Demand that issuer not register transfer
4‑8‑404
Wrongful registration
4‑8‑405
Replacement of lost, destroyed, or wrongfully taken security certificate
4‑8‑406
Obligation to notify issuer of lost, destroyed, or wrongfully taken security certificate
4‑8‑407
Authenticating trustee, transfer agent, and registrar
4‑8‑501
Securities account - acquisition of security entitlement from securities intermediary
4‑8‑502
Assertion of adverse claim against entitlement holder
4‑8‑503
Property interest of entitlement holder in financial asset held by securities intermediary
4‑8‑504
Duty of securities intermediary to maintain financial asset
4‑8‑505
Duty of securities intermediary with respect to payments and distributions
4‑8‑506
Duty of securities intermediary to exercise rights as directed by entitlement holder
4‑8‑507
Duty of securities intermediary to comply with entitlement order
4‑8‑508
Duty of securities intermediary to change entitlement holder’s position to other form of security holding
4‑8‑509
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
4‑8‑510
Rights of purchaser of security entitlement from entitlement holder
4‑8‑511
Priority among security interests and entitlement holders
4‑8‑601
Effective date
4‑8‑602
Repeals
4‑8‑603
Saving clause
Green check means up to date. Up to date

Current through Fall 2024

§ 4-8-108’s source at colorado​.gov