KRS 355.8-501: Securities account -- Acquisition of security entitlement from securities

intermediary.

(1) "Securities account" means an account to which a financial asset is or may be

credited in accordance with an agreement under which the person maintaining the

account undertakes to treat the person for whom the account is maintained as

entitled to exercise the rights that comprise the financial asset.

(2) Except as otherwise provided in subsections (4) and (5) of this section, a person

acquires a security entitlement if a securities intermediary:

(a) Indicates by book entry that a financial asset has been credited to the person's

securities account;

(b) Receives a financial asset from the person or acquires a financial asset for the

person and, in either case, a ccepts it for credit to the person's securities

account; or

(c) Becomes obligated under other law, regulation, or rule to credit a financial

asset to the person's securities account.

(3) If a condition of subsection (2) of this section has been met, a pers on has a security

entitlement even though the securities intermediary does not itself hold the financial

asset.

(4) If a securities intermediary holds a financial asset for another person, and the

financial asset is registered in the name of, payable to th e order of, or specially

indorsed to the other person, and has not been indorsed to the securities

intermediary or in blank, the other person is treated as holding the financial asset

directly rather than as having a security entitlement with respect to th e financial

asset.

(5) Issuance of a security is not establishment of a security entitlement.