(a)  The relationship between a licensee or registrant and a user shall be evidenced by an agreement in a record signed by the licensee or registrant and by the user. The agreement:

(1)  Shall specify the jurisdiction whose law governs the agreement;

(2)  If governed by the law of a jurisdiction that is not a Uniform Commercial Code jurisdiction, the agreement shall:

(i)  Specify a Uniform Commercial Code jurisdiction as the securities intermediary’s jurisdiction for the purpose of Article 8; and

(ii)  State that the law in force in the Uniform Commercial Code jurisdiction under subsection (2)(i) of this section applies to all issues specified in Article 2(1) of the Hague Securities Convention;

(3)  Shall state that:

(i)  The licensee is a securities intermediary;

(ii)  The control of virtual currency by the licensee for the benefit of the user creates a securities account of which the user is the entitlement holder;

(iii)  The parties agree that the virtual currency is to be treated as a financial asset credited or held for credit to the securities account of the user; and

(iv)  The licensee will not grant a security interest in virtual currency which the licensee or registrant is obligated to maintain under § 8-504(a) of Article 8;

(4)  May not provide a standard for the licensee to comply with its duties under Part 5 of Article 8 of the Uniform Commercial Code which is less protective of the user than the standard that would apply under Part 5 of Article 8 of the Uniform Commercial Code in the absence of an agreement concerning the standard; and

(5)  May not provide that:

(i)  The securities intermediary’s jurisdiction for the purpose of Article 8 is a jurisdiction that is not a Uniform Commercial Code jurisdiction; or

(ii)  The law in force in a jurisdiction that is not a Uniform Commercial Code jurisdiction applies to all issues specified in Article 2(1) of The Hague Securities Convention.

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Terms Used In Rhode Island General Laws 6-56-4

  • Agreement: means a written contractual agreement between the merchant and the third-party delivery service. See Rhode Island General Laws 6-58-1
  • Control: has the meaning provided in Rhode Island General Laws 6-56-2
  • Entitlement: A Federal program or provision of law that requires payments to any person or unit of government that meets the eligibility criteria established by law. Entitlements constitute a binding obligation on the part of the Federal Government, and eligible recipients have legal recourse if the obligation is not fulfilled. Social Security and veterans' compensation and pensions are examples of entitlement programs.
  • Hague Securities Convention: means the Convention on the Law Applicable to Certain Rights in Respect of Securities Held with an Intermediary, concluded 5 July, 2006. See Rhode Island General Laws 6-56-2
  • Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
  • Uniform Commercial Code: A set of statutes enacted by the various states to provide consistency among the states' commercial laws. It includes negotiable instruments, sales, stock transfers, trust and warehouse receipts, and bills of lading. Source: OCC
  • Uniform Commercial Code jurisdiction: means a state that has enacted Article 8. See Rhode Island General Laws 6-56-2
  • User: means a person for which a licensee has control of virtual currency. See Rhode Island General Laws 6-56-2

(b)  To the extent that there is no agreement that complies with subsection (a) of this section, the relationship between a licensee or registrant and a user is determined as if the licensee or registrant and the user have an agreement that complies with subsection (a) of this section and specifies that the law of this state governs the agreement.

(c)  The effect of this section may not be varied by agreement.

History of Section.
P.L. 2019, ch. 226, § 5; P.L. 2019, ch. 246, § 5.