§ 25-8-103. Rules for determining whether certain obligations and interests are securities or financial assets. - North Carolina Statutes

§ 25‑8‑103.  Rulesfor determining whether certain obligations and interests are securities orfinancial assets.

(a)        A share or similarequity interest issued by a corporation, business trust, joint stock company,or similar entity is a security.

(b)        An "investmentcompany security" is a security. "Investment company security"means a share or similar equity interest issued by an entity that is registeredas an investment company under the federal investment company laws, an interestin a unit investment trust that is so registered, or a face‑amountcertificate issued by a face‑amount certificate company that is soregistered. Investment company security does not include an insurance policy orendowment policy or annuity contract issued by an insurance company.

(c)        An interest in apartnership or limited liability company is not a security unless it is dealtin or traded on securities exchanges or in securities markets, its termsexpressly provide that it is a security governed by this Article, or it is aninvestment company security. However, an interest in a partnership or limitedliability company is a financial asset if it is held in a securities account.

(d)        A writing that is asecurity certificate is governed by this Article and not by Article 3 of this Chapter,even though it also meets the requirements of that Article. However, anegotiable instrument governed by Article 3 is a financial asset if it is heldin a securities account.

(e)        An option orsimilar obligation issued by a clearing corporation to its participants is nota security, but is a financial asset.

(f)         A commoditycontract, as defined in G.S. 25‑9‑102(a)(15), is not a security orfinancial asset.

(g)        A document of titleis not a financial asset unless G.S. 25‑8‑102(a)(9)(iii) applies. (1941, c. 353, s. 15; G.S.,s. 55‑95; 1955, c. 1371, s. 2; 1965, c. 700, s. 1; 1989, c. 588, s. 1;1997‑181, s. 1; 1998‑217, s. 5; 2000‑169, s. 21; 2006‑112,s. 43.)