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HomeCommercial CodeDiv. 9Ch. 1§ 9106 Security And Commodity Control

§ 9106 Security And Commodity Control

Commercial Code·California
AI Summary·Official Text·Key Terms·Related Statutes·References
AI SummaryVerified

§ 9106 Security And Commodity Control

Key Takeaways

  • •If you own stocks or other investments, you control them if you have the right papers or agreements.
  • •If someone lends you money and uses your investments as a guarantee, they can control those investments in two ways: either they are the company holding the investments, or everyone agrees they can decide what happens with the money from those investments.
  • •If the lender controls all your investments in an account, they control the whole account.

Example

You take a loan and use your stocks as a guarantee. The bank says they can take the money from your stocks if you don’t pay back the loan.

The bank can control your stocks because you all agreed they could use the money from the stocks to pay back the loan if needed.

AI-generated — May contain errors. Not legal advice. Always verify source.

Official Source
View on CA.gov

§ 9106 Security And Commodity Control

(a) A person has control of a certificated security, uncertificated security, or security entitlement as provided in Section 8106. (b) A secured party has control of a commodity contract if either of the following conditions is satisfied: (1) The secured party is the commodity intermediary with which the commodity contract is carried. (2) The commodity customer, secured party, and commodity intermediary have agreed that the commodity intermediary will apply any value distributed on account of the commodity contract as directed by the secured party without further consent by the commodity customer. (c) A secured party having control of all security entitlements or commodity contracts carried in a securities account or commodity account has control over the securities account or commodity account. (Repealed and added by Stats. 1999, Ch. 991, Sec. 35. Effective January 1, 2000. Operative July 1, 2001, by Sec. 75 of Ch. 991 and Section 9701.)

Last verified: January 23, 2026

Key Terms

controlsecured partycommodity contractsecurity entitlementcommodity intermediary

Related Statutes

  • § 8112 Creditor Access To Securities
  • § 9104 Secured Party Control Over Deposit Accounts
  • § 8104 Security Interest Acquisition
  • § 8106 Security Purchaser Control Rules
  • § 8109 Entitlement Order Warranties

References

  • Official text at leginfo.legislature.ca.gov
  • California Legislature. Commercial Code. Section 9106.
View Official Source