1. (a) A purchaser has control of an authoritative electronic copy of a record evidencing chattel paper if a system employed for evidencing the assignment of interests in the chattel paper reliably establishes the purchaser as the person to which the authoritative electronic copy was assigned.
2. (b) A system satisfies subsection (a) if the record or records evidencing the chattel paper are created, stored, and assigned in a manner that:
3. (1) A single authoritative copy of the record or records exists which is unique, identifiable, and, except as otherwise provided in paragraphs (4), (5), and (6), unalterable;
4. (2) The authoritative copy identifies the purchaser as the assignee of the record or records;
5. (3) The authoritative copy is communicated to and maintained by the purchaser or its designated custodian;
6. (4) Copies or amendments that add or change an identified assignee of the authoritative copy can be made only with the consent of the purchaser;
7. (5) Each copy of the authoritative copy and any copy of a copy is readily identifiable as a copy that is not the authoritative copy; and

8. (6) Any amendment of the authoritative copy is readily identifiable as authorized or unauthorized.

   1. (c) A system satisfies subsection (a), and a purchaser has control of an authoritative electronic copy of a record evidencing chattel paper, if the electronic copy, a record attached to or logically associated with the electronic copy, or a system in which the electronic copy is recorded:
9. (1) Enables the purchaser readily to identify each electronic copy as either an authoritative copy or a nonauthoritative copy;
10. (2) Enables the purchaser readily to identify itself in any way, including by name, identifying number, cryptographic key, office, or account number, as the assignee of the authoritative electronic copy; and

11. (3) Gives the purchaser exclusive power, subject to subsection (d), to:

    1. (A) Prevent others from adding or changing an identified assignee of the authoritative electronic copy; and
    2. (B) Transfer control of the authoritative electronic copy.
    3. (d) Subject to subsection (e), a power is exclusive under subsection (c)(3)(A) and (B) even if:
12. (1) The authoritative electronic copy, a record attached to or logically associated with the authoritative electronic copy, or a system in which the authoritative electronic copy is recorded limits the use of the authoritative electronic copy or has a protocol programmed to cause a change, including a transfer or loss of control; or

13. (2) The power is shared with another person.

    1. (e) A power of a purchaser is not shared with another person under subsection (d)(2) and the purchaser's power is not exclusive if:
14. (1) The purchaser can exercise the power only if the power also is exercised by the other person; and

15. (2) The other person:

    1. (A) Can exercise the power without exercise of the power by the purchaser; or
    2. (B) Is the transferor to the purchaser of an interest in the chattel paper.
    3. (f) If a purchaser has the powers specified in subsection (c)(3)(A) and (B), the powers are presumed to be exclusive.
    4. (g) A purchaser has control of an authoritative electronic copy of a record evidencing chattel paper if another person, other than the transferor to the purchaser of an interest in the chattel paper:
16. (1) Has control of the authoritative electronic copy and acknowledges that it has control on behalf of the purchaser; or
17. (2) Obtains control of the authoritative electronic copy after having acknowledged that it will obtain control of the electronic copy on behalf of the purchaser.

Source: SL 2000, ch 231 ; SL 2012, ch 238 , § 2, eff. July 1, 2013; SL 2024, ch 198 , § 45.