(1) In this article:
(a) "Adverse claim" means a claim that a claimant has a property interest in a financial asset and that it is a violation of the rights of the claimant for another person to hold, transfer, or deal with the financial asset;
(b) "Bearer form," as applied to a certificated security, means a form in which the security is payable to the bearer of the security certificate according to its terms but not by reason of an indorsement;
(c) "Broker" means a person defined as a broker or dealer under the federal securities laws, but without excluding a bank acting in that capacity;
(d) "Certificated security" means a security that is represented by a certificate;
(e) "Clearing corporation" means:
1. A person that is registered as a "clearing agency" under the federal securities laws;
2. A federal reserve bank; or 3. Any other person that provides clearance or settlement services with respect to financial assets that would require it to register as a clearing agency under the federal securities laws but for an exclusion or exemption from the registration requirement, if its activities as a clearing corporation, including promulgation of rules, are subject to regulation by a federal or state governmental authority;
(f) "Communicate" means to:
1. Send a signed record; or 2. Transmit information by any mechanism agreed upon by the persons transmitting and receiving the information;
(g) 1. "Entitlement holder" means a person identified in the records of a securities intermediary as the person having a security entitlement against the securities intermediary.
2. If a person acquires a security entitlement by virtue of KRS 355.8- 501(2)(b) or (c), that person is the entitlement holder;
(h) "Entitlement order" means a notification communicated to a securities intermediary directing transfer or redemption of a financial asset to which the entitlement holder has a security entitlement;
(i) 1. "Financial asset," except as otherwise provided in KRS 355.8-103, means:
a. A security;
b. An obligation of a person or a share, participation, or other interest in a person or in property or an enterprise of a person, which is, or is of a type, dealt in or traded on financial markets, or which is recognized in any area in which it is issued or dealt in as a medium for investment; or c. Any property that is held by a securities intermediary for another person in a securities account if the securities intermediary has expressly agreed with the other person that the property is to be treated as a financial asset under this article.
2. As context requires, the term means either the interest itself or the means by which a person's claim to it is evidenced, including a certificated or uncertificated security, a security certificate, or a security entitlement;
(j) Reserved;
(k) "Indorsement" means a signature that alone or accompanied by other words is made on a security certificate in registered form or on a separate document for the purpose of assigning, transferring, or redeeming the security or granting a power to assign, transfer, or redeem it;
(l) "Instruction" means a notification communicated to the issuer of an uncertificated security which directs that the transfer of the security be registered or that the security be redeemed;
(m) "Registered form," as applied to a certificated security, means a form in which:
1. The security certificate specifies a person entitled to the security; and 2. A transfer of the security may be registered upon books maintained for that purpose by or on behalf of the issuer, or the security certificate so states;
(n) "Securities intermediary" means:
1. A clearing corporation; or 2. A person, including a bank or broker, that in the ordinary course of its business maintains securities accounts for others and is acting in that capacity;
(o) "Security," except as otherwise provided in KRS 355.8-103, means an obligation of an issuer or a share, participation, or other interest in an issuer or in property or an enterprise of an issuer:
1. Which is represented by a security certificate in bearer or registered form, or the transfer of which may be registered upon books maintained for that purpose by or on behalf of the issuer;
2. Which is one of a class or series or by its terms is divisible into a class or series of shares, participations, interests, or obligations; and 3. Which:
a. Is, or is of a type, dealt in or traded on securities exchanges or securities markets; or b. Is a medium for investment and by its terms expressly provides that it is a security governed by this article;
(p) "Security certificate" means a certificate representing a security;
(q) "Security entitlement" means the rights and property interest of an entitlement holder with respect to a financial asset specified in Part 5 of this article; and (r) "Uncertificated security" means a security that is not represented by a certificate.
(2) The following definitions in this article and other articles of this chapter apply to this article:
(a) "Appropriate person." KRS 355.8-107;
(b) "Control." KRS 355.8-106;
(c) "Controllable account." KRS 355.9-102;
(d) "Controllable electronic record." KRS 355.12-102;
(e) "Controllable payment intangible." KRS 355.9-102;
(f) "Delivery." KRS 355.8-301;
(g) "Investment company security." KRS 355.8-103;
(h) "Issuer." KRS 355.8-201;
(i) "Overissue." KRS 355.8-210;
(j) "Protected purchaser." KRS 355.8-303; and (k) "Securities account." KRS 355.8-501.
(3) In addition, Article 1 of this chapter contains general definitions and principles of construction and interpretation applicable throughout this article.
(4) The characterization of a person, business, or transaction for purposes of this article does not determine the characterization of the person, business, or transaction for purposes of any other law, regulation, or rule.