N.Y. Uniform Commercial Code Law § 12-105: Control of Controllable Electronic Record

Section 12--105. Control of Controllable Electronic Record.

(a) General rule: control of controllable electronic record. A person

has control of a controllable electronic record if the electronic

record, a record attached to or logically associated with the electronic

record, or a system in which the electronic record is recorded:

(1) gives the person:

(A) power to avail itself of substantially all the benefit from the

electronic record; and

(B) exclusive power, subject to subsection (b), to:

(i) prevent others from availing themselves of substantially all the

benefit from the electronic record; and

(ii) transfer control of the electronic record to another person or

cause another person to obtain control of another controllable

electronic record as a result of the transfer of the electronic record;

and

(2) enables the person readily to identify itself in any way,

including by name, identifying number, cryptographic key, office, or

account number, as having the powers specified in paragraph (1).

(b) Meaning of exclusive. Subject to subsection (c), a power is

exclusive under subsection (a)(1)(B)(i) and (ii) even if:

(1) the controllable electronic record, a record attached to or

logically associated with the electronic record, or a system in which

the electronic record is recorded limits the use of the electronic

record or has a protocol programmed to cause a change, including a

transfer or loss of control or a modification of benefits afforded by

the electronic record; or

(2) the power is shared with another person.

(c) When power not shared with another person. A power of a person is

not shared with another person under subsection (b)(2) and the person's

power is not exclusive if:

(1) the person can exercise the power only if the power also is

exercised by the other person; and

(2) the other person:

(A) can exercise the power without exercise of the power by the

person; or

(B) is the transferor to the person of an interest in the controllable

electronic record or a controllable account or controllable payment

intangible evidenced by the controllable electronic record.

(d) Presumption of exclusivity of certain powers. If a person has the

powers specified in subsection (a)(1)(B)(i) and (ii), the powers are

presumed to be exclusive.

(e) Control through another person. A person has control of a

controllable electronic record if another person, other than the

transferor to the person of an interest in the controllable electronic

record or a controllable account or controllable payment intangible

evidenced by the controllable electronic record:

(1) has control of the electronic record and acknowledges that it has

control on behalf of the person; or

(2) obtains control of the electronic record after having acknowledged

that it will obtain control of the electronic record on behalf of the

person.

(f) No requirement to acknowledge. A person that has control under

this section is not required to acknowledge that it has control on

behalf of another person.

(g) No duties or confirmation. If a person acknowledges that it has or

will obtain control on behalf of another person, unless the person

otherwise agrees or law other than this article or Article 9 otherwise

provides, the person does not owe any duty to the other person and is

not required to confirm the acknowledgment to any other person.