2724

LAWS OF MARYLAND

Ch. 720

NOTED IN THE INITIAL TRANSACTION STATEMENT SENT TO THE PURCHASER
OR, IF HIS INTEREST IS TRANSFERRED TO HIM OTHER THAN BY
REGISTRATION OF TRANSFER, PLEDGE OR RELEASE, THE INITIAL
TRANSACTION STATEMENT SENT TO THE REGISTERED OWNER OR THE
REGISTERED PLEDGEE.

[(2)] (3) The fact that the purchaser (including a broker
for the seller or buyer) OF A CERTIFICATED OR UNCERTIFICATED
SECURITY has notice that the security is held for a third person
or is registered in the name of or indorsed by a fiduciary does
not create a duty of inquiry into the rightfulness of the
transfer or constitute CONSTRUCTIVE notice of adverse claims.
[If, however] HOWEVER, IF the purchaser (excluding an
intermediary bank) has knowledge that the proceeds are being used
or [that] the transaction is for the individual benefit of the
fiduciary or otherwise in breach of duty, the purchaser is
charged with notice of adverse claims.

8-305.

An act or event [which] THAT creates a right to immediate
performance of the principal obligation [evidenced] REPRESENTED
by [the] A CERTIFICATED security or [which] sets a date on or
after which [the] A CERTIFICATED security is to be presented or
surrendered for redemption or exchange does not [of] itself
constitute any notice of adverse claims except in the case of a
[purchase] TRANSFER:

(a)  After [one] 1 year from any date set for [such]
presentment or surrender for redemption or exchange; or

(b)  After [six] 6 months from any date set for
payment of money against presentation or surrender of the
security if funds are available for payment on that date.

8-306.

(1)  A person who presents a CERTIFICATED security for
registration of transfer or for payment or exchange warrants to
the [issue] ISSUER that he is entitled to the registration,
payment or exchange. But a purchaser for value AND without notice
of adverse claims who receives a new, reissued or reregistered
CERTIFICATED security on registration of transfer OR RECEIVES AN
INITIAL TRANSACTION STATEMENT CONFIRMING THE REGISTRATION OF
TRANSFER OF AN EQUIVALENT UNCERTIFICATED SECURITY TO HIM warrants
only that he has no knowledge of any unauthorized signature (§
8-311) in a necessary indorsement.

(2)  A person by transferring a CERTIFICATED security to a
purchaser for value warrants only that:

(a)  His transfer is effective and rightful; [and]

(b)  The security is genuine and has not been
materially altered; and