HARRY HUGHES, Governor

3729

(1)  A purchaser (including a broker for the seller or buyer
but excluding an intermediary bank) of a CERTIFICATED security is
charged with notice of adverse claims if:

(a)  The security whether in bearer or registered form
has been indorsed "for collection" or "for surrender" or for some
other purpose not involving transfer; or

(b)  The security is in bearer form and has on it an
unambiguous statement that it is the property of a person other
than the transferor. The mere writing of a name on a security is
not such a statement.

(2)  A PURCHASER (INCLUDING A BROKER FOR THE SELLER OR
BUYER, BUT EXCLUDING AN INTERMEDIARY BANK) TO WHOM THE TRANSFER,
PLEDGE OR RELEASE OF AN UNCERTIFICATED SECURITY IS REGISTERED IS
CHARGED WITH NOTICE OF ADVERSE CLAIMS AS TO WHICH THE ISSUER HAS
A DUTY UNDER § 8-403(4) AT THE TIME OF REGISTRATION AND WHICH ARE
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.