44-7016. Transferable records; definition

A. A person has control of a transferable record if a system employed for evidencing the transfer of interests in the transferable record reliably establishes that person as the person to which the transferable record was issued or transferred.

B. A system complies with subsection A and a person has control of a transferable record if the transferable record is created, stored and assigned in such a manner that all of the following are true:

1. A single authoritative copy of the transferable record exists that is unique, identifiable and, except as otherwise provided in paragraphs 4, 5 and 6 of this subsection, unalterable.

2. The authoritative copy identifies the person asserting control as either:

(a) The person to which the transferable record was issued.

(b) If the authoritative copy indicates that the transferable record has been transferred, the person to which the transferable record was most recently transferred.

3. The authoritative copy is communicated to and maintained by the person asserting control or the person's designated custodian.

4. Copies or revisions that add or change an identified assignee of the authoritative copy can be made only with the consent of the person asserting control.

5. Each copy of the authoritative copy and any copy of a copy is readily identifiable as a copy that is not the authoritative copy.

6. Any revision of the authoritative copy is readily identifiable as authorized or unauthorized.

C. Except as otherwise agreed, a person that has control of a transferable record is the holder as defined in section 47-1201 of the transferable record and has the same rights and defenses as a holder of an equivalent record or writing pursuant to title 47 including, if the applicable requirements under section 47-3302, subsection A or section 47-7501 or 47-9308 are satisfied, the rights and defenses of a holder in due course, a holder to which a negotiable document of title has been duly negotiated or a purchaser, respectively.  Delivery, possession and indorsement are not required to obtain or exercise any of the rights under this subsection.

D. Except as otherwise agreed, an obligor under a transferable record has the same rights and defenses as an equivalent obligor under equivalent records or writings under title 47.

E. If requested by a person against which enforcement is sought, the person seeking to enforce the transferable record shall provide reasonable proof that the person is in control of the transferable record.  Proof may include access to the authoritative copy of the transferable record and related business records that are sufficient to review the terms of the transferable record and to establish the identity of the person that has control of the transferable record.

F. For the purposes of this section, "transferable record" means an electronic record that both:

1. Would be a note pursuant to title 47, chapter 3 or a document pursuant to title 47, chapter 7 if the electronic record were in writing.

2. The issuer has expressly agreed the electronic record is a transferable record.