18. Transfer Authority for Investments etc.

(1) A Person has Transfer Authority for an Investment or bill of exchange if the Person has the necessary authority and documentation to transfer title to the Investment or bill.

(2) For bearer Investments, any Person with physical possession of the Investment has Transfer Authority.

(3) For bills of exchange and Investments Transferred by Endorsement, a Person has Transfer Authority if the Person has authority to Endorse the bill or Investment to a third party.

(4) For registered Investments, a Person has Transfer Authority if the Person is in possession of, or has authority to execute, an Instruction to the relevant registrar (however described) to register the Investments in the name of a Transferee.

(5) For Investments held in an Investment Account, a Person has Transfer Authority if the Person is entitled to give the Investment Intermediary an entitlement order.

19. Acquisition of Investment

A Person acquires an Investment if:

• (a) the Person is a Purchaser to whom the Investment is Delivered; or
• (b) the Person otherwise acquires an Investment Entitlement to the Investment

20. Notice of Third Party Property Interest in Certificated Investment

(1) A Purchaser of a Certificated Investment has notice of a Third Party Property Interest if the certificate:

• (a) has been Endorsed or otherwise designated for a purpose or use not involving Transfer; or
• (b) is a Bearer Security and has on it an unambiguous statement that it is the Property of a Person other than the Transferor, but the mere writing of a name on the certificate is not such a statement.

(2) The filing under the AIFC Security Regulations of a financing statement relating to a security interest is not notice of a Third Party Property Interest in an Investment.

21. Meaning of Control

(1) A Person has Control of a Bearer Security in physical form if the physical form of the Security has been Delivered to the Person, and the Person has possession of that form, the Person retains Control of the Bearer Security while the Person retains possession of the physical form of the Security.

(2) A Person has Control of an Investment in Registered Form if the Person is registered as the owner of the Investment or has Transfer Authority in relation to it.

(3) A Person has Control of an Uncertificated Investment if:

• (a) the Investment is held in an Investment Account in the Person’s name; or
• (b) the issuer has agreed to comply with instructions given by or on behalf of a Purchaser without further consent by the registered owner.

(4) A Person has Control of an Investment Entitlement if:

• (a) the Person becomes the Entitlement Holder; or
• (b) the Investment Intermediary who maintains the Investment Account to which the Investment Entitlement is credited has agreed to comply with Instructions given by the Person without further consent by the Entitlement Holder.

(5) However, if an interest in an Investment Entitlement is granted by the Entitlement Holder to the Entitlement Holder’s own Investment Intermediary, the Investment Intermediary has Control of the Investment Entitlement.

(6) If a Person satisfies the requirements of subsection (3)(b) in relation to an Uncertificated Investment, the Person has Control of the Uncertificated Investment even if the registered owner retains the right to make substitutions for the Uncertificated Investment, to give Instructions to the issuer or otherwise to deal with the Uncertificated Investment.

(7) The issuer of an Uncertificated Investment may not enter into an agreement of the kind mentioned in subsection (3)(b) (a relevant agreement) without the consent of the registered owner, but the issuer is not required to enter into a relevant agreement even though the registered owner directs. If the issuer has entered into a relevant agreement, the issuer is not required to confirm the existence of the agreement to another Person unless the registered owner requests.

(8) If a Person satisfies the requirements of subsection (4)(b) in relation to an Investment Entitlement, the Person has Control of the Investment Entitlement even if the Entitlement Holder retains the right to make substitutions for the Investment Entitlement, to give Instructions to the Investment Intermediary or otherwise to deal with the Investment Entitlement.

(9) The Investment Intermediary for an Investment Entitlement may not enter into an agreement of the kind mentioned in subsection (4)(b) (a relevant agreement) without the consent of the Entitlement Holder, but the Investment Intermediary is not required to enter into a relevant agreement even though the Entitlement Holder directs. If the Investment Intermediary has entered into a relevant agreement, the Investment Intermediary is not required to confirm the existence of the agreement to another Person unless the Entitlement Holder so requests.

22. No requirement for writing etc

(1) This section applies to Persons who are parties to an agreement, or subject to the business rules of an Authorised Market Institution, if they have agreed, or the business rules provide, that records of holdings or entitlements, contracts for purchase, Contracts of Sale or instructions for debit or credit relating to Investments, Investment Entitlements, or assets held in an Investment Account, may be made otherwise than in writing.

(2) The absence of signed writing or record authenticated by a party against whom enforcement is sought does not invalidate the enforceability of the holding, entitlement, contract or instruction if it was created or transmitted in accordance with the agreement or business rules.