A person acting as authenticating trustee, transfer agent, registrar or other agent for an issuer in the registration of a transfer of its securities, in the issue of new security certificates or uncertificated securities or in the cancellation of surrendered security certificates has the same obligation to the holder or owner of a certificated or uncertificated security with regard to the particular functions performed as the issuer has in regard to those functions.

History: 1978 Comp., § 55-8-407, enacted by Laws 1996, ch. 47, § 44.

OFFICIAL COMMENTS

UCC Official Comments by ALI & the NCCUSL. Reproduced with permission of the PEB for the UCC. All rights reserved.

1. Transfer agents, registrars, and the like are here expressly held liable both to the issuer and to the owner for wrongful refusal to register a transfer as well as for wrongful registration of a transfer in any case within the scope of their respective functions where the issuer would itself be liable. Those cases which have regarded these parties solely as agents of the issuer and have therefore refused to recognize their liability to the owner for mere non-feasance, i.e., refusal to register a transfer, are rejected. Hulse v. Consolidated Quicksilver Mining Corp., 65 Idaho 768, 154 P.2d 149 (1944); Nicholson v. Morgan, 119 Misc. 309, 196 N.Y.Supp. 147 (1922); Lewis v. Hargadine-McKittrick Dry Goods Co., 305 Mo. 396, 274 S.W. 1041 (1924).

2. The practice frequently followed by authenticating trustees of issuing certificates of indebtedness rather than authenticating duplicate certificates where securities have been lost or stolen became obsolete in view of the provisions of Section 8-405 [55-8-405 NMSA 1978], which makes express provision for the issue of substitute securities. It is not a breach of trust or lack of due diligence for trustees to authenticate new securities. Cf. Switzerland General Ins. Co. v. N.Y.C. & H.R.R. Co., 152 App.Div. 70, 136 N.Y.S. 726 (1912).

"Certificated security" Section 8-102(a)(4) [55-8-102 NMSA 1978]

"Issuer" Section 8-201 [55-8-201 NMSA 1978]

"Security" Section 8-102(a)(15)

"Security certificate" Section 8-102(a)(16)

"Uncertificated security" Section 8-102(a)(18)

Repeals and reenactments. — Laws 1996, ch. 47, § 44, repealed former 55-8-407 NMSA 1978, as amended by Laws 1987, ch. 248, § 45, relating to the exchangeability of securities, and enacted a new section, May 15, 1996. For provisions of former section, see the 1995 NMSA 1978 on NMOneSource.com.