1. Subsection (a) provides that a purchaser of a certificated or uncertificated security acquires all rights that the transferor had or had power to transfer. This statement of the familiar "shelter" principle is qualified by the exceptions that a purchaser of a limited interest acquires only that interest, subsection (b), and that a person who does not qualify as a protected purchaser cannot improve its position by taking from a subsequent protected purchaser, subsection (c).
2. Although this section provides that a purchaser acquires a property interest in a certificated or uncertificated security, it does not state that a person can acquire an interest in a security only by purchase. Article 8 also is not a comprehensive codification of all of the law governing the creation or transfer of interests in securities. For example, the grant of a security interest is a transfer of a property interest, but the formal steps necessary to effectuate such a transfer are governed by article 9, not by article 8. Under the article 9 rules, a security interest in a certificated or uncertificated security can be created by execution of a security agreement under section 9-203 and can be perfected by filing. A transfer of an article 9 security interest can be implemented by an article 8 delivery, but need not be.
Similarly, article 8 does not determine whether a property interest in certificated or uncertificated security is acquired under other law, such as the law of gifts, trusts, or equitable remedies. Nor does article 8 deal with transfers by operation of law. For example, transfers from decedent to administrator, from ward to guardian, and from bankrupt to trustee in bankruptcy are governed by other law as to both the time they occur and the substance of the transfer. The article 8 rules do, however, determine whether the issuer is obligated to recognize the rights that a third party, such as a transferee, may acquire under other law. See sections 8-207, 8-401, and 8-404.
Definitional Cross References:
"Certificated security". Section 8-102(a)(4).
"Delivery". Section 8-301.
"Notice of adverse claim". Section 8-105.
"Protected purchaser". Section 8-303.
"Purchaser". Sections 1-201(33), 8-116.
"Uncertificated security". Section 8-102(a)(18).