2742

LAWS OF MARYLAND

Ch. 720

(3)  Unless an issuer is charged with notice of an adverse
claim from a controlling instrument which it has elected to
require under [subsection (4) of] § 8-402(4) or receives
notification of an adverse claim under subsection (1) [of this
section, where], IP a CERTIFICATED security presented for
registration is indorsed by the appropriate person or persons the
issuer is under no duty to inquire into adverse claims. In
particular:

(a)  An issuer registering a CERTIFICATED security in
the name of a person who is a fiduciary or who is described as a
fiduciary is not bound to inquire into the existence, extent, or
correct description of the fiduciary relationship and thereafter
the issuer may assume without inquiry that the newly registered
owner continues to be the fiduciary until the issuer receives
written notice that the fiduciary is no longer acting as such
with respect to the particular security;

(b)  An issuer registering transfer on an indorsement
by a fiduciary is not bound to inquire whether the transfer is
made in compliance with a controlling instrument or with the law
of the state having jurisdiction of the fiduciary relationship,
including any law requiring the fiduciary to obtain court
approval of the transfer; and

(c)  The issuer is not charged with notice of the
contents of any court record or file or other recorded or
unrecorded document even though the document is in its possession
and even though the transfer is made on the indorsement of a
fiduciary to the fiduciary himself or to his nominee.

(4)  AN ISSUER IS UNDER NO DUTY AS TO ADVERSE CLAIMS WITH
RESPECT TO AN UNCERTIFICATED SECURITY EXCEPT:

(A)  CLAIMS EMBODIED IN A RESTRAINING ORDER,
INJUNCTION OR OTHER LEGAL PROCESS SERVED ON THE ISSUER, IF THE
PROCESS WAS SERVED AT A TIME AND IN A MANNER AFFORDING THE ISSUER
A REASONABLE OPPORTUNITY TO ACT ON IT IN ACCORDANCE WITH THE
REQUIREMENTS OF SUBSECTION (5);

(B)  CLAIMS OF WHICH THE ISSUER HAS RECEIVED A WRITTEN
NOTIFICATION FROM THE REGISTERED OWNER OR THE REGISTERED PLEDGEE
IF THE NOTIFICATION WAS RECEIVED AT A TIME AND IN A MANNER
AFFORDING THE ISSUER A REASONABLE OPPORTUNITY TO ACT ON IT IN
ACCORDANCE WITH THE REQUIREMENTS OF SUBSECTION (5);

(C)  CLAIMS (INCLUDING RESTRICTIONS ON TRANSFER NOT
IMPOSED BY THE ISSUER) TO WHICH THE REGISTRATION OF TRANSFER TO
THE PRESENT REGISTERED OWNER WAS SUBJECT AND WERE SO NOTED IN THE
INITIAL TRANSACTION STATEMENT SENT TO HIM; AND

(D)  CLAIMS AS TO WHICH AN ISSUER IS CHARGED WITH
NOTICE FROM A CONTROLLING INSTRUMENT HE HAS ELECTED TO REQUIRE
UNDER § 8-402(4).