CHAPTER 21

An Act to amend the Code of Virginia by adding in Title 18.1 thereof |
Chapter numbered 4.1, containing sections numbered 13.1-424 throug!
18.1-488, to provide a uniform and simplified method for fiduciar
security transfers. [H 98

Approved February 17, 1960

Be it enacted by the General Assembly of Virginia: __
1. That the Code of Virginia be amended by adding in Title 18.1 thereo:
a Chapter numbered 4.1, containing sections numbered 18.1-424 throug
13.1-438 as follows:
Chapter 4.1

Uniform Act for the Simplification of
Fiduciary Security Transfers

§ 18.1-424. This chapter may be cited as “The Uniform Act fo1
the Simplification of Fiduciary Security Transfers”.

§ 18.1-425. In this chapter, unless the context otherwise requires.

“Assignment” includes any written stock power, bond power
bill of sale, deed, declaration of trust, or other instrument of transfer.

(b) “Claim of beneficial interest” includes a claim of any interest by
a decedent’s legatee, distributee, heir, or creditor, a beneficiary under 2
trust, a ward, a beneficial owner of a security registered in the name of ¢
nominee, or a minor owner of a security registered in the name of a cus
todian, or a claim of any similar interest, whether the claim is asserted
by the claimant or by a fiduciary or by any other authorized person or
his behalf, and includes a claim that the transfer would be in breach of
fiduciary duties. .

(c) “Corporation” means a private or public corporation, association
or trust issuing a security. ;

(d) “Fiduciary” means an executor, administrator, trustee, guardian.
committee, conservator, curator, custodian, or nominee.

(e) “Person” includes an individual, a corporation, government or
governmental subdivision or agency, business trust, estate, trust, partner-
ship or association, two or more persons having a joint or common interest,
or any other legal or commercial entity.

(f) “Security” includes any share of stock, bond, debenture, note,
or other security issued by a corporation which is registered as to owner-
ship on the books of the corporation. oo.

(g) “Transfer” means a change on the books of a corporation in
the registered ownership of a security.

(h) “Transfer agent’? means a person employed or authorized by a
corporation to transfer securities issued by the corporation, including a

§ 13.1-426. A corporation or transfer agent registering a security
in the name of a person who is a fiduciary or who is described as a fiduci-
ary is not bound to inquire into the existence, extent, or correct descrip-
tion of the fiduciary relationship; and thereafter the corporation and its
transfer agent may assume without inquiry that the newly registered
owner continues to be the fiduciary until the corporation or transfer agent
receives written notice that the fiduciary is no longer acting as such with
respect to the particular security.

§ 13.1-427. Except as otherwise provided in this chapter, a corpor-
ation or transfer agent making a transfer of a security pursuant to an
issignment by a fiduciary

(a) may assume without inquiry that the assignment, even though
to the fiduciary himself or to his nominee, is within his authority and
capacity and is not in breach of his fiduciary duties; _

_._ (b) may assume without inquiry that the fiduciary has complied
with any controlling instrument and with the law of the jurisdiction gov-
erning the fiduciary relationship, including any law requiring the fiduci-
ary to obtain court approval of the transfer; and , ae

_ (c) is not charged with notice of and is not bound to obtain or ex-
amine any court record or any recorded or unrecorded document relating
to the fiduciary relationship or the assignment, even though the record
or document is in its possession.

§ 13.1-428. A corporation or transfer. agent making a transfer
pursuant to an assignment by a fiduciary who is not the registered owner
shall obtain the following evidence of appointment or incumbency:

(a) In the case of a fiduciary appointed or qualified by a court, a
certificate issued by or under the direction or supervision of that court or
an officer thereof and dated within sixty days before the transfer; or —

(b) In any other case, a copy of a document showing the appoint-
ment or a certificate issued by or on behalf of a person reasonably believed
by the corporation or transfer agent to be responsible, or, in the absence
of such a document or certificate, other evidence reasonably deemed by
the corporation or transfer agent to be appropriate. Corporations and
transfer agents may adopt standards with respect to evidence of appoint-
ment or incumbency under this subsection (b) provided such standards
are not manifestly unreasonable. Neither the corporation nor transfer
agent is charged with notice of the contents of any document obtained
pursuant to this subsection (b) except to the extent that the contents relate
directly to the appointment or incumbency.

§ 13.1-429. (a) A person asserting a claim of beneficial interest
adverse to the transfer of a security pursuant to an assignment by a
fiduciary may give the corporation or transfer agent written notice of the
claim. The corporation or transfer agent is not put on notice unless the
written notice identifies the claimant, the registered owner, and the issue
of which the security is a part, provides an address for communications
directed to the claimant and is received before the transfer. Nothing in
this chapter relieves the corporation or transfer agent of any liability for
making or refusing to make the transfer after it is so put on notice, unless
it proceeds in the manner authorized in subsection (b).

(b) As soon as practicable after the presentation of a security for
transfer pursuant to an assignment by a fiduciary, a corporation or trans-
fer agent which has received notice of a claim of beneficial interest ad-
verse to the transfer may send notice of the presentation by registered or
certified mail to the claimant at the address given by him. If the corpor-
ation or transfer agent so mails such a notice it shall withhold the transfer
for thirty days after the mailing and shall then make the transfer unless
restrained by a court order.

§ 13.1-430. A corporation or transfer agent incurs no liability to
any person by making a transfer or otherwise acting in a manner author-
ized by this chapter.

§ 13.1-431. (a) No person who participates in the acquisition, dis-
position, assignment or transfer of a security by or to a fiduciary, includ-
ing a person who guarantees the signature of the fiduciary, is liable for
participation in any breach of fiduciary duty by reason of failure to in-

uire whether the transaction involves such a breach unless it is shown
that he acted with actual knowledge that the proceeds of the transaction
were being or were to be used wrongfully for the individual benefit of
the fiduciary or that the transaction was otherwise in breach of duty.

(b) If a corporation or transfer agent makes a transfer pursuant to
an assignment by a fiduciary, a person who guaranteed the signature of
the fiduciary is not liable on the guarantee to any person to whom the
corporation or transfer agent by reason of this chapter incurs no liability.

(c) This section does not impose any liability upon the corporation
or its transfer agent.

§ 13.1-432. (a) The rights and duties of a corporation and its
transfer agents in registering a security in the name of a fiduciary or in
making a transfer of a security pursuant to an assignment by a fiduciary
are governed by the law of the jurisdiction under whose laws the corpor-
ation is organized.

(b) This chapter applies to the rights and duties of a person other
than the corporation and its transfer agents with regard to acts and omis-
sions in this State in connection with the acquisition, disposition, assign-
ment, or transfer of a security by or to a fiduciary and of a person who
guarantees in this State the signature of a fiduciary in connection with
such a transaction.

§ 13.1-433. This chapter shall be so construed as to effectuate its
general purpose to make uniform the law of those states which enact it.