Financial Asset | Practical Law

Financial Asset | Practical Law

Financial Asset

Financial Asset

Practical Law Glossary Item 5-383-2186 (Approx. 3 pages)

Glossary

Financial Asset

Defined in the UCC as any of the following:
  • A security (as defined in UCC § 8-102(a)(15) of the UCC).
  • 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.
  • Any property held by a securities intermediary for another person in a securities account if the securities intermediary expressly agrees with the other person that the property is treated as a financial asset under UCC Article 8. As the context requires, the term means either the interest itself or the means by which a person produces evidence, including a certificated or uncertificated security, a security certificate, or a security entitlement.
Exceptions to the definition of financial asset are specified in UCC § 8-103 which sets out the rules for determining whether certain obligations and interests are securities or financial assets. For more information on financial assets, see Practice Note, Security Interests: Investment Property.