The Oklahoma Bar Journal January 2023

Article 8, is expanded to include the new definitions in Article 9 for “controllable account” and “con trollable payment intangible” and the new Article 12’s definition of “controllable electronic record.” The amendment adds a new Subsection 8-103(h) to clarify that digital assets generally are not financial assets unless they fit the definition of Section 8-102(a)(9)(iii) (part of the definition of “financial asset” regarding arrangements for property to be held by a securities intermediary and credited to a securities account). Present Subsection 8-106(d) speci fies the three mechanisms by which a purchaser obtains control of a security entitlement. The proposed amendment revises Subsection 8-106(d)(3) to clarify the procedure for a purchaser obtaining control through another person’s control and acknowledgment of control. The amendments add a new Subsection 8-106(h) to clarify that a person meeting the test for “control” does not have a duty to acknowledge it has control on behalf of a purchaser. A new Subsection 8-106(i) is added to clarify that, unless otherwise required by contract or by Articles 8 or 9, a person acknowledging it has or will have control on behalf of a purchaser generally does not owe a duty to the purchaser and is under no obligation to confirm the acknowl edgment to any other person. Regarding choice of law, the amendments add a new Subsection 8-110(g) requiring matters noted in Subsection (a) or (b) to be governed by the local law of the issuer’s or the securities intermediary’s home jurisdiction, even if the matter bears no other relation to the jurisdiction. The amendments strike the unnecessary clause at the begin ning of the present Subsection 8-303(b).

Amendments to Sections 2-201, 2-202, 2-203, 2-205 and 2-209 provide for replacement of the term “writing” with “record” to eliminate the impression that a transaction must be memorialized on paper – this will recognize electronic documents and transactions.

The amendment to Section 7-106 provides a more fulsome descrip tion of the system of control of electronic documents and is the functional equivalent of the changes to Section 9-105 (electronic chattel paper) and the addition of Section 9-105A (electronic money). It provides system requirements, the meaning of exclusivity and the method of obtaining control through a third person. ARTICLE 8 The proposed amendments to UCC Article 8 are minimal and designed to bring Article 8’s con trol provisions into harmony with the correlating provisions under Article 9 and the new Article 12. The amendments to Article 8 do not have any adverse effect on existing Oklahoma law and are primarily clarifications. Amended Section 8-102(a)(6) broadens the application to elec tronic records; the amendment updates the definition of “com municate” by replacing the word “writing” with “record.” In amended Section 8-102(b), the list of definitions from other articles, which also apply to

ARTICLE 5 Present Section 5-104 permits “authentication” by a manner agreed to between the parties or by “standard practice.” The amendment requires the letter of credit be “signed” as that term is defined in Section 1-201(b)(37). This brings Article 5 into harmony with the balance of the UCC. For choice of law rules, liability is determined by the “location” of the issuer, nominated person or adviser. Present Section 5-116 deems the issuer to be “located” at the address on the undertak ing or if more than one address is indicated, the address from which the undertaking was issued. Branches are considered separate entities. The amendments add a new Section 5-116(d), making clear that the location of a branch is determined by the same rules as those that govern the location of the issuer. The definitions of “record” and “sign” in Section 7-102(a) are deleted in the amendments. They are redundant in that both terms are now defined in Section 1-201. ARTICLE 7

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THE OKLAHOMA BAR JOURNAL