CHAPTER 92
FORMERLY
SENATE BILL NO. 120
AN ACT TO AMEND TITLE 6 OF THE DELAWARE CODE RELATING TO COMMERCE AND TRADE.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE :
Section 1.
Amend § 9-104(a), Article 9, Title 6 of the Delaware Code by deleting the word "or" immediately preceding subsection (3), replacing the period at the end of subsection (3) with a semicolon, and adding new subsections (4) and (5) which shall read as follows:
".(4) the debtor, secured party, and bank have authenticated a record that (i) is conspicuously denominated a control agreement, (ii) identifies the specific deposit account in which the secured party claims a security interest, and (iii) contains one or more provisions addressing the disposition of funds in the deposit account or the right to direct the disposition of funds in the deposit account; or "
(5) the name on the deposit account is the name of the secured party or indicates that the secured party has a security interest in the deposit account."
Section 2.
Amend § 9-104, Article 9, Title 6 of the Delaware Code by adding new subsections (c), (d) and (e) which shall read as follows:
"(c) No Implied Duties of Bank. The authentication of a record by the bank under subsection (a)(2) or (a)(4) does not impose upon the bank any duty not expressly agreed to by the bank in the record. The naming of the deposit account in the name of the secured party or with an indication that the secured party has a security interest in the deposit account under subsection (a)(5) does not impose upon the bank any duty not expressly agreed to by the bank.
(d) Conditions not relevant. A secured party has control under subsection (a)(2) even if any duty of the bank to comply with instructions originated by the secured party directing disposition of the funds in the deposit account is subject to any condition or conditions (other than further consent by the debtor). A secured party has control under subsection (a)(4) even if the provision or provisions addressing the disposition of funds in the deposit account or the right to direct the disposition of funds in the deposit account are subject to any condition or conditions (other than further consent by the debtor).
(e) No inferences. The procedures and requirements of subsections (a)(4) and (a)(5) available to obtain control shall not be used in interpreting the sufficiency of a secured party’s compliance with the procedures and requirements of subsections (a)(1), (a)(2) or (a)(3) to obtain control. The provisions of subsections (a)(4) and (a)(5) shall create no inference regarding the requirements for compliance with subsection (a)(1), (a)(2) or (a)(3)."
Section 3.
Amend § 9-106, Article 9, Title 6 of the Delaware Code by adding new subsections (d) and (e) which shall read as follows:
" (d) Control of securities account. A secured party has control of a securities account if the name on the securities account is the name of the secured party or indicates that the secured party has a security interest in the securities account.
(e) No Implied Duties of Securities Intermediary. The naming of the securities account in the name of the secured party or with an indication that the secured party has a security interest in the securities account under subsection (d) does not impose upon the securities intermediary any duty not expressly agreed to by the securities intermediary."
Section 4.
Amend § 8-106(c), Article 8, Title 6 of the Delaware Code by deleting the word "or" immediately preceding subsection (2), by deleting the period immediately following subsection (2) and replacing it with "; or", and by adding a new subsection (3) which shall read as follows:
" (3) the issuer, the registered owner, and the purchaser have authenticated a record that (i) is conspicuously denominated a control agreement, (ii) identifies the uncertificated security in which the purchaser claims an interest, and (iii) contains one or more provisions addressing instructions relating to the uncertificated security or the right to originate instructions relating to the uncertificated security."
Section 5.
Amend § 8-106(d), Article 8, Title 6 of the Delaware Code by deleting the word "or" immediately preceding subsection (3), by deleting the period immediately following subsection (3) and replacing it with "; or", and by adding a new subsection (4) which shall read as follows:
" (4) the securities intermediary, the entitlement holder, and the purchaser have authenticated a record that (i) is conspicuously denominated a control agreement, (ii) identifies the security entitlement in which the purchaser claims an interest, and (iii) contains one or more provisions addressing entitlement orders relating to the security entitlement or the right to originate entitlement orders relating to the security entitlement."
Section 6.
Amend § 8-106(g), Article 8, Title 6 of the Delaware Code by deleting the words "subsection (c)(2) or (d)(2)" and substituting in lieu thereof the words "subsection (c)(2), (c)(3), (d)(2), or (d)(4)".
Section 7.
Amend § 8-106, Article 8, Title 6 of the Delaware Code by adding new subsections (h) and (i) which shall read as follows:
" (h) Under subsection (c)(2), (c)(3), (d)(2), or (d)(4), authentication of a record does not impose upon the issuer or securities intermediary any duty not expressly agreed to by the issuer or securities intermediary in the record.
(i) A purchaser has "control" under subsection (c)(2), (c)(3), (d)(2), or (d)(4) even if any duty of the issuer or the securities intermediary to comply with instructions or entitlement orders originated by the purchaser is subject to any condition or conditions (other than further consent by the registered owner or the entitlement holder)."
Section 8. This Act shall become effective upon its enactment into law.