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Legal Memorandum: Acquisition of a Security or Interest in a Security

Issue: Must a secured party register shares in its own name to effectuate transfer of the shares after default pursuant to the Securities Transfer Act?

Area of Law: Corporate & Securities, UCC & Secured Transactions
Keywords: Security or interest in a security; Acquires; Registration of the transfer of the shares
Jurisdiction: British Columbia
Cited Cases: None
Cited Statutes: Securities Transfer Act §17(4), § 17(1), § 68, § 68(1)(a), § 69(1)
Date: 02/01/2010

Under the Securities Transfer Act, a person who is required by agreement “to transfer, deliver, present, surrender, exchange or otherwise put in the possession of another person a security . . . satisfies that requirement by causing the other person to acquire an interest in the security.”  Securities Transfer Act §17(4).  A person acquires a security or interest in a security under the Act if “the person is a purchaser to whom a security is delivered under section 68.”  Id. § 17(1).  Under § 68 “[d]elivery of a certificated security to a purchaser occurs when . . . the purchaser acquires possession of the security certificate.”  Id. § 68(1)(a). Such a purchaser “acquires all rights in the security that the transferor had or had power to transfer.”  Id. § 69(1).   Registration of the transfer of the shares then would be the responsibility of the secured party.

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